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The Armed Forces Pension Scheme (AFPS) is an unfunded, defined benefit occupational pension open to most members of the armed forces. It is non-contributory for members but the value of pension benefits is taken into account in setting pay.

The AFPS was reformed in the early 2000s with the existing scheme – now Armed Forces Pension Scheme 1975 (AFPS 75) – closed to new entrants in April 2005. A new scheme – Armed Forces Pension Scheme 2005 (AFPS 05) – was introduced for new entrants from that date.

The Government legislated in the Public Service Pensions Act 2013 for longer term reform of public service schemes. A new pension scheme for members of the armed forces (AFPS 15) was introduced from 1 April 2015. Serving members on that date transferred to the new scheme covered by transitional protection arrangements for those ‘closest to retirement.’ The new scheme provides pension benefits based on career average rather than final salary. In addition, members of the armed forces (like police and firefighters) will have a normal pension age of 60.

Other relevant Library notes include: SN 5892 Armed forces pension reform, 1995-2005 (March 2011) and SN 1424 Armed forces pensions legacy issues – survivors’ benefits (November 2014 and SN 5768 Public service pension reform – 2010 onwards (October 2012).

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