This year’s pay award has significant implications for pensions
The announcement by the Government (24 July 18) about this year’s pay award has significant implications for pensions. The Forces Pension Society explains.
The announcement is welcome, as is confirmation of the effective date (ie this increase will be back-dated to 1 Apr 18). Now the award has been announced, we eagerly anticipate the publication of the 2018 ’75 scheme pension codes (rate tables). This award has a number of pension implications:
- The ’75 scheme code will increase, resulting in ’75 scheme awards being more valuable when compared to awards calculated using the 2017 code.
- Pension entitlements for personnel on the ’15 and ’05 pension schemes can now be calculated with greater accuracy, reflecting the increased salary (’05 scheme awards are based on final salary; ’15 scheme entitlements accrue as a proportion of salary).
- Personnel that have left the services from 1 Apr this year, with calculations based on last year’s salary rates and last year’s pension code can now have their correct and proper pension and Early Departure Payment (EDP) entitlements calculated and paid.
For personnel that discharged/retired from service prior to 1 Apr 18, this announcement will not have any impact on their awards; they will continue to be increased in line with inflation (CPI – Consumer Price Index) and are not pegged to AFPRB awards.
Source: Forces Pension Society