The main features of the new scheme are (new features in bold):

• One scheme for all – including Reservists.
• A Career Average scheme (rather than final salary).
• No personal contributions.
• A pension accrual rate of 1/47th for all.
• Benefits earned under the new scheme while serving will be increased (‘revalued’) annually by an average earnings index.
• The Deferred Pension age (known as the Preserved Pension age in the current schemes) will be linked to the State Pension Age.
• An Early Departure Payment (EDP), consisting of a lump sum and income stream, with further work being undertaken to investigate the potential for allowing greater flexibility in how the EDP is taken.
• Normal Pension Age of 60, though pension can be taken earlier (from 55), actuarially reduced from the Deferred Pension Age, as it will be paid for longer.
• No automatic pension lump sum, but with the option of generating a lump sum by commuting (reducing), the pension income.
• Pensions in payment and Deferred Pensions to increase in line with the Consumer Prices Index (CPI).
• Dependants’ benefits, ill-health pensions and death-in-service benefits in line with AFPS 05 provisions.
• Abolition of abatement if an individual returns to the Services after retirement.
• A break of five years or less will be treated as continuous service for indexation.
• Annual pension forecast statements.
• A Government commitment that there should be no further changes to public service pensions for the next 25 years.

Reference

MOD (Ministry of Defence) (2013) A New Armed Forces Pension Scheme: Outline Scheme Design. London: MOD.