Keith Jones 989
23-06-2010, 08:50
I was reading about this and then found some discussion about it on ARRSE but nobody seemed to know the rates or why, so I sent an email to the Pensions Office and this is the response I got:
'All ex-service personnel who have at least 1 years reckonable service prior to 1 April 1980 will be liable for an abatement to their Armed Forces Pension on reaching state pension age i.e age 60 for women & age 65 for men. This abatement will be applied to their Armed Forces Pension at the appropriate age irrespective of whether their state pension is in payment or not.<o:p></o:p>
<o:p> </o:p>
The reason for this abatement goes back to when the National Insurance Scheme was made compulsory for all employed persons in 1948. This scheme made flat rate National Insurance contributions compulsory for all employees and employers irrespective of whether the employer concerned already provided their own occupational pension scheme. As a result, employers who provided their own occupation pension schemes, were contributing to both pensions schemes for the same period of service.<o:p></o:p>
<o:p> </o:p>
Provisions were therefore introduced to allow such occupational pension schemes to reduce benefits at age 60/65 by £0.8708 a year for each complete year of reckonable service prior to 1 April 1980.<o:p></o:p>
<o:p> </o:p>
Additionally, employees who contributed to the Graduated Pension Scheme during the period 3 April 1961 to 5 April 1975 will have their Armed Forces pension reduced by the basic graduated pension earned by their graduated contributions. Again, this reduction is made to prevent an individual from receiving the benefit of both the state pension scheme and an occupational pension scheme for the same period of employment.<o:p></o:p>
<o:p> </o:p>
The level of abatement notified to an individual on a letter from Pensions Division will differ from the actual amount deducted from the pension by Xafinity Paymaster. This is because there was a change to the method of applying these abatements for individuals who reached age 60/65 on or after 1 May 2008. All such abatements are now subject to increase in line with the Retail Price Index, in other words the same increases which are applicable to an individuals pension are applicable to the level of the abatement.<o:p></o:p>
<o:p> </o:p>
Example – an individual with 15 years reckonable service prior to 1 April 1980 will be liable for an abatement of 15 x £0.8708 = £13.06 and as a result of Graduated Pension Scheme contributions an abatement of £20.80. The total abatement notified to the pensioner by letter is therefore £33.86.<o:p></o:p>
<o:p> </o:p>
The pension has however attracted increases amounting to 48.679%, therefore the same increases are applied to the abatement, i.e £33.86 + 48.679% = £50.34 – this is the amount by which the individuals pension will be reduced at age 60/65.'
I have sent a supplementary question (as one always does!) to confirm that the amounts quoted are based on ANNUAL amounts and not weekly nor monthly amounts taken from the AF Pension.
If anybody else out there, who is fast approaching the fateful date, has come across this query, I hope this is helpful
<o:p></o:p>
<o:p> </o:p>
'All ex-service personnel who have at least 1 years reckonable service prior to 1 April 1980 will be liable for an abatement to their Armed Forces Pension on reaching state pension age i.e age 60 for women & age 65 for men. This abatement will be applied to their Armed Forces Pension at the appropriate age irrespective of whether their state pension is in payment or not.<o:p></o:p>
<o:p> </o:p>
The reason for this abatement goes back to when the National Insurance Scheme was made compulsory for all employed persons in 1948. This scheme made flat rate National Insurance contributions compulsory for all employees and employers irrespective of whether the employer concerned already provided their own occupational pension scheme. As a result, employers who provided their own occupation pension schemes, were contributing to both pensions schemes for the same period of service.<o:p></o:p>
<o:p> </o:p>
Provisions were therefore introduced to allow such occupational pension schemes to reduce benefits at age 60/65 by £0.8708 a year for each complete year of reckonable service prior to 1 April 1980.<o:p></o:p>
<o:p> </o:p>
Additionally, employees who contributed to the Graduated Pension Scheme during the period 3 April 1961 to 5 April 1975 will have their Armed Forces pension reduced by the basic graduated pension earned by their graduated contributions. Again, this reduction is made to prevent an individual from receiving the benefit of both the state pension scheme and an occupational pension scheme for the same period of employment.<o:p></o:p>
<o:p> </o:p>
The level of abatement notified to an individual on a letter from Pensions Division will differ from the actual amount deducted from the pension by Xafinity Paymaster. This is because there was a change to the method of applying these abatements for individuals who reached age 60/65 on or after 1 May 2008. All such abatements are now subject to increase in line with the Retail Price Index, in other words the same increases which are applicable to an individuals pension are applicable to the level of the abatement.<o:p></o:p>
<o:p> </o:p>
Example – an individual with 15 years reckonable service prior to 1 April 1980 will be liable for an abatement of 15 x £0.8708 = £13.06 and as a result of Graduated Pension Scheme contributions an abatement of £20.80. The total abatement notified to the pensioner by letter is therefore £33.86.<o:p></o:p>
<o:p> </o:p>
The pension has however attracted increases amounting to 48.679%, therefore the same increases are applied to the abatement, i.e £33.86 + 48.679% = £50.34 – this is the amount by which the individuals pension will be reduced at age 60/65.'
I have sent a supplementary question (as one always does!) to confirm that the amounts quoted are based on ANNUAL amounts and not weekly nor monthly amounts taken from the AF Pension.
If anybody else out there, who is fast approaching the fateful date, has come across this query, I hope this is helpful
<o:p></o:p>
<o:p> </o:p>