Armed Forces Pension Scheme and preserved pensions

Until 1975, those who left relevant employment before the normal pension age for the scheme generally had no statutory rights to preserved benefits, or to receive back the contributions that they had paid into an occupational pension scheme. Members of the Armed Forces could qualify for an Immediate Pension after 22 years reckonable service (or 16 years reckonable service for officers). Commissions or engagements for shorter periods were on non-pensionable terms. Those who had served 12 years (or nine years in the case of officers) were awarded a gratuity.

The Social Security Act 1973 introduced for the first time, for those who left after April 1975, a right to a preserved pension. This was initially restricted to those who were over the age of 25 and had completed at least five years’ pensionable service. The age requirement was subsequently removed and the five-year period reduced to two. For members of the armed forces who left after April 1975, the right to a preserved pension was implemented through Armed Forces Pension Scheme 1975 (AFPS 75).

There have been long-running campaigns that the right to a preserved pension should be extended to those who left before April 1975. Successive governments have argued that discretionary changes to improve the benefits from public service pension schemes should be implemented from a current date for future service only. Improvements are not applied retrospectively, as to do otherwise would “make any worthwhile improvements unaffordable.”

Reforms to the AFPS were introduced in April 2005, with a new scheme for new entrants (AFPS 05) – see Library Briefing Paper CBP 5892 and for AFPS 2015 under the Public Service Pensions Act 2013, see CBP 5891.