Topical Pension Issues
Public Services Pensions and the Armed Forces
The Forces Pension Society response to the interim report published by the Hutton Commission is posted on our website as a Note to Members. This paper sets out the issues of the wider public services pension review and its impact on the Armed Forces.
- The Armed Forces have no trade union, they should not need one, but they rely on the Chiefs of Staff, working under the direction of Ministers, to protect them from any ill informed or prejudicial changes to their terms and conditions of service, especially in the pension area. Recent reductions in staff numbers of 40% and the pressures of SDSR on the staffs at MOD have left it less able to deal with the complexity and the totality of the current pension issues. Accordingly, the most informed advice and comment in the field of occupational pensions and terminal benefits is the Forces Pension Society.
- Now that the provisions of the emergency budget are becoming clear the extent of devaluation of Armed Forces pensions has become a matter of deep concern to Service people, past and present. Our country rightly demands that younger people should fight for us and the profession of arms has a unique nature, now recognised across all parties and government departments: the majority then leaves the Service relatively early, in most cases, by an age of about 40. Others, neither braver nor less brave, are forced to leave early by accident or injury. In all of these cases, any change in indexation to CPI would hit extremely hard, uniquely, for up to 45 years, as these examples show.
- Disabled double amputee 28 year old Corporal £587,000 by age 70
- 40 year old Sergeant Royal Marines £212,000 by age 85
- 40 year old Squadron Leader £319,000 by age 85
- The vast majority of Service widows over the next 40 years will be condemned to a lonely future by the current rules applying to re-marriage, which result in loss of widow’s pension. This is an outdated and scandalous situation and must be stopped.
- The Armed Forces will be uniquely affected as a result of the Unique Nature of Military Service which places demands and restrictions upon those serving, unparalleled elsewhere in the Public Sector.
This, together with the Military Covenant, which states “Armed Forces must always be able to expect fair treatment” is in our view being ignored by the new Government in its anxiety to get things done quickly.
For example, how fair is it to change indexation to CPI when all MOD brochures have promised RPI indexation?
We call upon the Government to desist from talk of the Covenant until the issues we have highlighted have been recognised and resolved. - Hasty decisions have unforeseen consequences for the Service community. Time for deliberation is needed; for example, over the guardianship of the Armed Forces Pension Schemes. In the light of what has happened to indexation, we urge Lord Hutton to consider new arrangements for the trusteeship of the Armed Forces Pension schemes so that they are insulated from the crushing pressure of the Defence budget.
