Army pension

Hi Everyone

Update on the Change in the Age when Pension Benefits can be claimed by Former Spouses... Was sent this today....Hopefully by having a point of contact we will be able to see what our options are...

A8 - Do you want me to send you the link?


Armed Forces Pension Schemes - Pension Benefits on Divorce -
Change in the Age when Pension Benefits can be claimed by Former Spouses

As a result of a recent change in legislation, former spouses and civil partners now have the option to claim their pension benefits from the age of 55.

I am recently divorced. My ex-husband is a serving member of the British Armed Forces and a member of their pension scheme. Does this change apply to me?

This will depend on whether, at the time of your divorce, the Court awarded you a pension share Order, and the date of that Order. If your Order was made after 6 April 09, you already have the right to claim your pension benefits from the age of 55. If your Order was made before 6 April 09, this change in legislation now gives you the right to claim your pension benefits from the age of 55, rather than having to wait until either 60 or 65. If you have not been awarded a pension sharing Order, this change does not apply to you.

The same arrangements also apply to a former civil partner as a result of a dissolution of a civil partnership.

It does not affect the age when your ex-husband can draw his or her pension.

What is a Pension Share Order?

At the time of divorce or dissolution of a civil partnership, a Court can make an Order creating pension rights for a former spouse or civil partner out of the benefits in the scheme which the member has built up at the time the Order is made. The share of the pension benefits which the former spouse or civil partner will receive will depend on the percentage specified in the Order. In Scotland, a Court can specify a monetary amount as an alternative to a percentage. The Order which creates these pension rights is known as a Pension Sharing Order.

Will my pension be affected if I claim my pension early?

Yes. Your pension benefits are based on the assumption that you will receive your pension at either 60 or 65. If you claim your pension earlier, your benefits will be calculated in the normal way but will then be reduced to take account of the fact that your pension will be paid to you over a potentially longer period of time. This type of pension is known as an actuarially reduced pension. The amount by which your pension will be reduced can be significant. This is why you should always ask for a pension estimate before deciding to take your pension early.

How do I obtain an estimate?

If you are interested in having your pension paid at age 55, or immediately if you are already over age 55, you should write to:

Service Personnel and Veterans Agency (SPVA)
Pensions Division
Pensions on Divorce Section
Mail Point 480
Kentigern House
65 Brown Street
Glasgow
G2 8EX

SPVA will provide you with an estimate of the benefits you may receive. If the estimate is acceptable to you, SPVA will put your pension into payment if that is what you require. Unfortunately, there is currently a delay to this service caused by the requirement to update computer systems to reflect this recent change. We apologise for any inconvenience that this may cause, but your letter will be acknowledged and you will be advised when we expect to be in a position to provide you with an estimate.

Yes please!

Well, that sounds really good! If I understand it correctly if I was to be awarded a pension share now, then at any time up to the age of 65 I could ask for a pension estimate and opt to take the pension early (as long as I had reached age 55). This gives the oportunity to have the Clean Break that I want but still have the flexibility to take a reduced pension if circumstances make it necessary. I have always thought 'what if I suffer ill health and have to work part-time, how would I cope financially'.

Is there a catch? have I missed something?

Penny

Your best bet, I would think, would be to contact SPVA at the address on the Update and find out all your options.

Marsa

Equal rights to information for ex-spouse members of occupational pension schemes like AFPS?

www.pensionsadvisoryservice.org.uk/occup...pensions/disclosure/

Does the legislation give the same disclosure entitlement to people who become occupational pension scheme members on divorce?

eg " What benefits are payable and how they are calculated, including the definition of pensionable earnings and the scheme accrual rate." etc.......

....a Court can make an Order creating pension rights for a former spouse or civil partner out of the benefits in the scheme which the member has built up at the time the Order is made.....

This is a strange thing to say, since I thought that an Army Pension wasn't strictly speaking a 'pension' - it is 'Retired Pay'...there is no biuld up of benefits, as it non-contributory by both the employee AND the employer. There is no money pot that is being built up/invested. The only investment is the time you serve.

Anyone know if this 'pension v. pay' issue has been challenged in a court?

Penny10p- The catch is that you get a very much reduced pension. Think of it this way: the "value" you get is no bigger, but you want to spread it over a period starting 10 years earlier.

Statistically you are also much less likely to die from 55 to 65 than from 65 to 75, so the figures will be weighted to take account of that.

I don't know the specific figures, but I've seen it suggested that for each year early you take a pension, the amount may be reduced by about 5% per year. Take it 10 years early, that would mean you get only get about half what you would have got at 65 on that basis.

Difficult choice...