Lord Touhig – 2016 Parliamentary Question to the Ministry of Defence

The below Parliamentary question was asked by Lord Touhig on 2016-01-28.

To ask Her Majesty’s Government what financial arrangements are in place to support reservists upon leaving (1) the army, (2) the Royal Navy, and (3) the Royal Air Force, and what is the total cost of those arrangements.

Earl Howe

From 1 April 2015 Reserve personnel have had access to the Armed Forces Pension Scheme 2015 (AFPS 15), unless covered by Transitional Protection in an existing scheme. For the first time, pay received for Man Training Days is pensionable. This represents an increase in the overall package for Reserves and one that aligns the structure of Reservists’ remuneration more closely with that of Regulars. In common with all Service personnel, Reservists qualify for pension benefits under AFPS 15 after completing the mandatory vesting period of two calendar years and pension benefits are based on the average pensionable pay received from the date of joining the scheme. Other main features of the scheme are ill-health pensions, dependants’ benefits and death-in-service benefits. Any benefits built up in a legacy pension scheme prior to 1 April 2015 are protected.

As with other unfunded public sector pension schemes the Ministry of Defence’s contribution to meet the cost of these pensions is calculated by the Superannuation Charges Adjusted for Past Experience (SCAPE) mechanism – this is expressed as a percentage of the pay bill and following the last valuation is set at 50.4%.