Annex B
SUMMARY OF COSTS OF BENEFITS UNDER THE PROPOSED
ARMED FORCES PENSION SCHEME SET OUT IN 2001 CONSULTATION DOCUMENT
COSTS EXPRESSED AS A PERCENTAGE OF PENSIONABLE
PAY
| |
Existing Scheme | Proposed Scheme (based on IP at age 40 and 18 years service)
|
| Members Benefits |
| |
| Retirement |
| |
| a) pension | 12.8%
| 11.8% |
| b) lump sum | 2.4%
| 2.2% |
| Exit with preserved benefits |
| |
| a) pension | 2.5%
| 2.6% |
| b) lump sum | 0.7%
| 0.7% |
| Sub total retirement and preserved benefits
| 18.4% | 17.3%
|
Ill health
a) pension
b) lump sum
|
1.0%
0.2%
|
1.3%
0.3%
|
| Sub total | 1.2%
| 1.6% |
| Spouse's Benefits |
| |
| On death after: |
| |
a) retirement
b) exit with preserved benefits
c) ill-health
d) in service
| 1.3%
0.7%
0.2%
0.1%
| 1.3%
0.8%
0.3%
0.3%
|
| Sub total | 2.3%
| 2.7% |
| Lump Sum on death in service | 0.1%
| 0.4% |
| Sub total | 0.1%
| 0.4% |
| Grand Total | 22.0%*
| 22.0%* |
NOTES:
1—1 per cent of pensionable pay is approximately £40
million per annum
Source—Government Actuary's Department
2 —The figures were calculated using the latest demographic
data at the time the review calculations were carried out (which
was over the period 1999 to 2001).
This figure is an average for Officers and Other Ranks—for
Officers the average value is nearly 34 per cent and an average
for Other Ranks of just over 18 per cent (reflecting their average
shorter length of service).
| 
