Early Day Motion - Ex-Servicemen and Women [pensions]

jpl_75

Badgeman
This Early Day Motion has gained quite considerable support, to date there are 111 signatures plus an adjourment debate has been scheduled for Wednesday the 31st January in the House of Commons.
The Armed Forcies Pension Group have been actively encouraging Members of the Pension Group to contact their respective Members of Parliament asking for support and to sign the EDM.
There is still a long way to go on this one but it appears we are at last moving in the right direction.
 

janner

MIA
Book Reviewer
I have sent my MP an email asking that he signs up, this is very important to a lot of us who left before the pensions regs changed.

See here for details of the Armed Forces Pensions Group

www.afpg.info/index.htm


Here for a copy of the EDM cut and paste to your MP


edmi.parliament.uk/EDM...ESSION=885


Here for your MP's contact details


www.upmystreet.com/commons/l/

If you cut and past the whole EDM will go into the permitted space on the email
 

Dima

Newbie
Like many people, I also fall into the catergory of dipping out on any form of service pension so this latest news is of great interest to me.

As a permanent Resident of Spain, I no longer have a Constituancy MP so has anyone any thoughts on who I could communicate with to ask their support on this motion?

Cheers

Dima
 

janner

MIA
Book Reviewer
An interesting point Dima, as you still pay UK taxes there should be some sort of representative that can make your feelings known

Can I suggest that everyone affected by this pensions trap reads the latest news on the Armed Forces Pensions Group site and makes every effort to gain both publicity and support from their MP's

www.afpg.info/index.htm
 

F169

War Hero
I never understood why officers joining at 16 werent entitled to a pension for time served before reaching 21.

I wonder how many people in the old days were warned by their DOs that if they didnt serve 22 years they would get nothing at all, ever........It seems a bit like receiving bad financial advice about endowment policies, only they got some recompense.
 

jpl_75

Badgeman
Can I suggest that everyone affected by this pensions trap reads the latest news on the Armed Forces Pensions Group site and makes every effort to gain both publicity and support from their MP's

www.afpg.info/index.htm
_________________
janner
I had previously had a meeting with my Member of Parliament regarding the pension claim this was before the Early Day Motion , at that time He stated that he wasn't able to offer his support.
Since EDM 67 i sent an E mail to my M.P. who now says that as He is a Cabinet Minister cannot sign EDMs ( I know this is true ) However he has stated that he will give His support, so it looks as though we are on the right track.
I emphasize janners remarks re all concerned contacting respective M.Ps.
JPL
 

janner

MIA
Book Reviewer
Reply from my MP, He will be getting a follow up email explaining what he can do for me. I think English might be the authors second language.

Dear Janner,

Many thanks for your email of 27 January.

I am afraid, as a Member of the Shadow Cabinet, I am precluded by
convention
from signing EDMS such as No. 67.

However, if there is a particular issue relating to Armed Forces
pensions
that you would now like me to take up, please do let me know what that
is
and how it affects you, so that do so.

With best wishes.

Yours sincerely,

Oliver Letwin
 
F169 said:
I never understood why officers joining at 16 werent entitled to a pension for time served before reaching 21.

I wonder how many people in the old days were warned by their DOs that if they didnt serve 22 years they would get nothing at all, ever........It seems a bit like receiving bad financial advice about endowment policies, only they got some recompense.
One of my former colleagues at work joined Dartmouth when he was 13!

I started work at 5... when I went to school... oh if only I could have my pension backdated to then: 1968... :grin:
 
janner said:
Any feed back on the debate the other night?
For those interested, the Debate was introduced by Colin Challen (who served for 3 years with the Crabs). The link is here.
http://www.publications.parliament.uk/pa/cm200607/cmhansrd/cm070131/debtext/70131-0019.htm#070131106000001

The Minister, Adam Ingram, in a detailed reply (Col 337-340) outlined the policy of sucessive governments to pensions policy and the reasons why, on account of the legal precident it would set, the Government could not make an exception for ex-Servicemen. In doing so he cited various legal judgments which supported this and previous government's position.

In consequence there will be no change.

Adam Ingram's reply in full below.

The Minister of State, Ministry of Defence (Mr. Adam Ingram): My hon. Friend the Member for Morley and Rothwell (Colin Challen) has done well to secure a debate on equal pension provision for service personnel, regardless of when they served in Her Majesty’s armed forces. Although the subject of British armed forces pensions has a long history that stretches back to the time of Elizabeth I, it is better that I start nearer the present day.

In the early 1970s, the Ministry of Defence introduced an armed forces pension scheme following the introduction of the military salary in 1970, which replaced the system of basic pay and allowances. The military salary meant that the MOD could link pensions to pay for the first time, and in April 1972, representative pay rates were introduced on which pensions for members of the armed forces pension scheme were based. That meant that under that scheme, members of the armed forces with the same rank and same number of years’ reckonable service were awarded the same pension, regardless of their actual pay on leaving service. Those pension arrangements are actually made up of three separate schemes that were established under a range of prerogative and statutory powers. The current arrangements are found in the Naval and Marine Pay and Pensions (Non-Effective Benefits and Family Pensions) Order 2001, the Army Pensions Warrant 1977 and the Queen’s regulations for the Royal Air Force. The enabling legislative powers are to be found respectively in the Naval and Marine Pay and Pensions Act 1865, the Pensions and Yeomanry Pay Act 1884 and the Air Force (Constitution) Act 1917.

In the early 1970s, members of the schemes were awarded a pension only if they had completed at least 16 years’ reckonable service as an officer, or 22 years’ reckonable service in another rank. Engagements for shorter periods were on non-pensionable terms. However, gratuities were awarded to those who left without qualifying for a pension, but who had completed nine years’ reckonable service as an officer, or 12 years’ reckonable service in another rank. The definition of reckonable service is all paid service after the age of 21 for officers, or after the age of 18 for other ranks.

Before the introduction of the Social SecurityAct 1973, there were no rights to preserved pensions in any public or private pension schemes. Most schemes had very restricted qualifying criteria for the award of pensions. For instance, to qualify for a pension under the civil service arrangements, an individual had to be over 50 and to have served for 10 or more years. Individuals who left voluntarily before meeting both these criteria lost their rights to pensions. The 1973 Act brought about changes by requiring all pension schemes to preserve pension rights for those who left service after 6 April 1975 and had completed at least five years’ qualifying service and attained the age of 26. Subsequent Social Security Acts reduced the qualifying period from five years to two years and removed the age qualification requirement. The armed forces pension scheme incorporated those changes from the operative date of 6 April 1975. It is for that reason, and to differentiate that scheme from the new pension scheme introduced in 2005, that we now call the scheme AFPS 75.

As my hon. Friend said, those changes were not retrospective. It is a legal principle that individuals receive benefits in accordance with the scheme rules that were in place at the time of their retirement. It is a principle of public service pensions policy, and one that has been upheld by successive Governments, that improvements to pension schemes are not made retrospective. If the changes were made retrospective, it would add significantly to the cost to the taxpayer, not least because the issue is common to other public service schemes, not just that for the armed forces.

My hon. Friend asks me to differentiate between members of the armed forces and others who serve as public servants, such as teachers and members of the emergency services, but that would be a legally untenable position. He also asked me to estimate the costs involved. We have not made a specific estimate of the cost of backdating armed forces preserved pensions to prior to 1975, and my hon. Friend alluded to some of the difficulties that would prevent us from achieving that.

We have made a general examination, and the numbers affected are very large, so the costs, whether for the armed forces or more widely, would be considerable and would run into billions of pounds. I fully recognise that a number of individuals who have no occupational pension rights for their time in the armed forces—

It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn. —[Mr. Alan Campbell.]

Mr. Ingram: I recognise that a number of individuals who have no occupational pension rights for their time in the armed forces are aggrieved that improvements to pension provisions since the mid-1970s were not applied retrospectively, but that does not mean that the work and commitment of those who served in the armed forces before 1975 is not valued. We value their contribution in many other ways, but I have set out the context in which judgments have to be made. I urge my hon. Friend to accept that his campaign would not apply to the armed forces alone, and it would have to apply to all public sector schemes. The costs for the armed forces would be prohibitive, and the wider costs, too, would be of considerable magnitude and would be simply unaffordable.

Successive Governments have taken the same view. There is no realistic prospect that this or any other Government could afford the many billions of pounds that would need to be found to address the issue. That is an easy statement to make, but the real test is the legal one. The issue has been legally tested, and a claim for pre-1975 pension entitlement for the armed forces failed in the High Court in 2003, in the House of Lords in 2004, and in the European Court of Human Rights in 2006. There are other legacy issues, in addition to the pre-1975 pension entitlement that arose from Government economic policies and other improvements to AFPS 75, which did not cover those who served before the changes were made. Issues such as pension troughs, widows’ and widowers’ pensions for life, widows’ post-retirement entitlement, and widows’ third-rate and half-rate pensions are not unique to the armed forces, as there is a read-across to other public sector schemes. As I have said, making retrospective changes to pension schemes would have financial implications across the wider public sector.

My hon. Friend said that we are proposing to spend money on nuclear defence, and I accept that that is the case. He urged us not to spend that money and to give it to the pensioners instead. Everyone wants a say in how that money is spent but, interestingly, when the public considered the matter, it wanted to retain the country’s nuclear defences. They will have another opportunity to consider the issue as the debate develops in the coming weeks before we make a decision. It is easy for my hon. Friend to make that equation, but he would have to queue up with everyone else who is campaigning for us not to go down that road and who has their own ideas about how that money should be disbursed. He should take into account, too, the public mood on that specific aspect of our national defence. I suspect, however, that we will find ourselves on different sides of the debate.

Since the 1970s there have been a number of improvements to pension provisions. For example, since the mid-1980s, individuals have had to serve for only two years to be entitled to preserved pension benefits and, from 1978, widows’ pension provisions were extended to widowers. AFPS 75 incorporated those improvements to the spirit and letter of the legislation that required their introduction. The Government recognise the importance of proper pension provision for the armed forces. Since 2000, attributable death benefits for widows and widowers have continued on remarriage. Since March 2003, pension benefits have been made available to eligible unmarried partners for service deaths related to conflict. In September 2003, the concession was extended to cover deaths attributable to service. Since April 2005, death-in-service lump sums have risen to three or four times pensionable salary, depending on whether the member belonged to AFPS 75 or the newly introduced armed forces pension scheme 2005.

The introduction of the new pension and compensation schemes in April 2005 was a considerable achievement, given that it came at a time when outside schemes were under pressure to move away from defined benefit arrangements. The scheme benefits compare favourably with other public service schemes and with schemes in the private sector. They reflect modern best practice and provide for a significant increase in family benefits. I am confident that our new schemes are designed to meet the needs of the armed forces in the 21st century.

My hon. Friend said that he had a small interest to declare, but I know that it is not the prospect of financial gain that prompted him to raise the subject, and I fully recognise the kind offer that he made. We have to set the arguments that he advances against the major developments that the Government brought about to improve the pensions of those who serve in Her Majesty’s armed forces. I appreciate the concerns that have been raised, but I set out to explain the reason for the current position and to put it in context. I fully recognise that my hon. Friend’s early-day motion has attracted support. I just hope that those who signed it will read this debate, understand the logic of my argument, and reflect on their support for the early-day motion.

My hon. Friend asked for a meeting between representatives from his campaign and the Secretary of State. As ever, that would be a matter for the Secretary of State, but I will certainly draw my right hon. Friend’s attention to the request. I said at the beginning of my remarks that I would not refer back to the time of Queen Elizabeth I, and although I notice that we have a considerable amount of time left, I do not intend to fill it by talking about what happened in that period of history. We must consider the considerable progress made in the way in which we look after people. As my hon. Friend generally recognised, there was a change for the better in 1975. That decision goes back to 1973, although it was implemented in 1975, and it was delivered by the Governments of the time.

The changes that my hon. Friend asks for would have an immense impact on public expenditure, and that is the why successive Governments did not revisit the decision; it was not from a lack of recognition of those who serve in Her Majesty’s armed forces, or elsewhere in public services. I think that that is a solid argument, and I ask my hon. Friend to reflect on his campaign.

Question put and agreed to.
 

jpl_75

Badgeman
HOUSE OF COMMONS LIBRARY
Research Service
1 Derby Gate
London SW1A 2DG Tel: 020 7219 4318
Fax: 020 7219 0947

Our ref:
Your ref:
2003/5/78BT
see compliments slip JML/jml 22 May 2003
Dear Mr Viggers,

Parliamentary pension scheme

One of your constituents has written to ask the current value of the Parliamentary pensions payable to an MP who served continuously from 1954 to 1966 and to one who served continuously from 1954 to 1976. He also asked whether such pensions were preserved until age 60 or 65 or are paid as soon as the beneficiary ceased to be an MP.

Unfortunately, this is not an easy question to answer, but I have done my best to provide an indication of the answer from the records to which I have access.

To take the last part of the question first: someone ceasing to be an MP in 1966 with 12 years' service would not have been eligible to receive his pension until age 651. Someone ceasing to be an MP in 1976 with 22 years' service would not have been eligible for his full pension until age 65, but could have taken an actuarially reduced pension at 602. A change was introduced by the Parliamentary Pensions Act 1978 which entitled Members who had reached the age of 62, had served for 25 years and did not intend to stand for Parliament again, to retire at dissolution on full accrued pension. However, this only applied to those retiring after the passing of the 1978 Act3.

Turning to the first part of the question, an occupational pension scheme for MPs was first introduced with effect from 16 October 1964 under the Ministerial Salaries and Members' Pensions Act 1965. All service after that date was reckonable and service immediately prior to that date up to a maximum of 10 years was also reckonable, free of cost to the Member4. So the first MP would have had 12 years' reckonable service and the second 22 years.

The 1965 scheme was unusual in that both benefits and contributions were fixed in money terms. The initial amount of pension was at the rate of £60 for each of the first 15 years of


--------------------------------------------------------------------------------

1 Review Body on Top Salaries, First Report: Ministers of the Crown and Members of Parliament, Cmnd 4836, December 1971, Appendix G, "Present Pension Scheme and Members' Fund", para 3
2 House of Commons, Parliamentary Contributory Pension Fund, 1973 edition, chapter 11
3 It received Royal Assent on 2 August 1978
4 Review Body on Top Salaries, First Report: Ministers of the Crown and Members of Parliament, Cmnd 4836, December 1971, Appendix G, "Present Pension Scheme and Members' Fund", para 3

1


reckonable service and £24 for each year of reckonable service from 16 to 45 years. These rates were increased by one-fifth in April 1971 (to £72 and £28.80)5. The Member and the Exchequer both contributed £150 per year to the fund. The Exchequer also bore the cost of crediting back service before 16 October 19646.

So the first MP would have built up entitlement to a pension of £720 (£60 x 12) per annum when he ceased to be an MP in 1966.

Radical changes were made to the scheme by the Parliamentary and Other Pensions Act 1972 which brought the MPs' scheme more into line with contemporary superannuation arrangements. All MPs serving on 1 January 1972 (with the exception of past and present Prime Ministers and the Speaker) became members of the new scheme. MPs contributed at a rate of 5% per annum in respect of service after 1 January 1972. Pension accrued at a standard rate of l/60th of final salary for each year of reckonable service. Years of reckonable service granted in respect of non-contributory service before 16 October 1964 and contributory service between 16 October 1964 and 31 December 1971 reckoned for benefit in exactly the same way as contributory service after 19727.

The salary of an MP in 1976 was £6,0628. However, the Parliamentmy and Other Pension Act 1976 provided that, for pensions purposes, the salary should be £8,000 with effect from 13 June 19759. So the second MP would have built up an entitlement to a pension of £2,933 (l/60th x £8.000 x 22) per annum when he ceased to be an MP in 1976.

The Ministerial Salaries and Members' Pensions Act 1965 did not provide for any form of automatic index-linking either of deferred pensions or pensions in payment. However, the 1972 changes provided for MPs' pensions to come within the scope of the Pensions (Increase) Act 1971 which at that time provided for biennial increases in public service pensions in line with inflation. The 1973 House of Commons booklet describes how this inflation-proofing would be applied to pensions earned before 1972:

16 Pensions Increase

1. Hitherto pensions awarded to former members of the House of Commons and to their dependants have not come within the scope of the Pensions (Increase) Acts. Following the reconstitution of the pension scheme whereby pension benefits are directly linked to the terminal salary of an individual member, the provisions of the Pensions (Increase) Act 1971 will now be applied by the Pensions Increase (Parliamentary Pensions) Regulations 1972 (S.I. 1972 No. 1298) to the pensions of former Members of the House of Commons, participating office holders and to their dependants from 1 December 1972.


--------------------------------------------------------------------------------

5 Members' Contributory Pension Fund (Increase of Benefits) Order 1971, SI 1971/623
6 Cmnd 4836, Appendix G, paras 9-10
7 House of Commons, Parliamentmy Contributory Pension Fund, 1973 edition, chapter 10. para 1
8 House of Commons Information Office Factsheet M5, Members' pay, pensions and allowances, Appendix 1, http://www.parliament.uk/documents/upload/M05.pdf
9 Addendum to House of Commons, Parliamentmy Contributory Pension Fund, 1973 edition 2


2


2. For Members and their dependants whose pensions were awarded under the Ministerial Salaries & Members Pensions Act 1965 or under Section 8 of the Parliamentary and Other Pensions Act 1972 (which provides for an alternative calculation of pension by reference to the 1965 Act) the regulations provide for the pensions (including the residual part of a year hitherto non-reckonable) to be treated for pensions increase purposes as having begun on the date from which the 1965 Act became effective (i.e. 16 October 1964), subject to a restriction in the amount of increase payable in each case to ensure that the pension together with increase does not exceed the rate of pension payable to a Member retiring on 31 December 1972 with a similar period of reckonable service.

3. For Members who retired under the Parliamentary and Other Pensions Act 1972 with pensions based partly on salary before 1 January 1972 and partly on salary after that date, that part of pension attributable to pre-1972 salary is deemed for pension purposes to have begun on 16 October 1964; again the increase is restricted in each case to ensure that the pre-1972 pension element together with increase does not exceed the pension payable to a Member retiring on 31 December 1972 with a similar period of reckonab1e service.

The 1971 Act also provided that pensions "began" for the purposes of increases on the last day of service even if the pension could not yet be paid because the beneficiary had not yet reached 65. Section 8(2) said;

A pension shall be deemed for purposes of this Act to begin on the day following the last day of the service in respect of which the pension is payable (whenever the pension accrues or becomes payable), except that.....

This had the effect of revaluing preserved pensions by inflation.

I am afraid I have not had time to go back and check how much each annual Pensions (Increase) Order under the 1971 Act actually increased official pensions, but to give a very rough idea of how much these hypothetical pensions might now be worth, I have increased them both by inflation:

£720 in 1966 would now be worth about £8,471

£2,933 in 1976 would now be worth about £13,523

I hope this will help you to reply to your constituent.



Yours sincerely

Julia Laurie
Business and Transport Section
Peter Viggers,MP

3

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This makes interesting reading
 
jpl_75 said:
HOUSE OF COMMONS LIBRARY
Research Service
1 Derby Gate
London SW1A 2DG Tel: 020 7219 4318
Fax: 020 7219 0947

Our ref:
Your ref:
2003/5/78BT
see compliments slip JML/jml 22 May 2003
Dear Mr Viggers,

Parliamentary pension scheme

One of your constituents has written to ask...
Dear me! Your MP was supposed to have this letter retyped on his own headed paper so that it (rightly) appears to have come from him personally. The point is, of course, that the Commons Library cannot respond to constituent's enquiries directly, but must do so through the constituent's MP.


Julia Laurie's surname is spelt Lourie, by the way!
 

xxspikexx

Lantern Swinger
i did 14 yrs (12 pensionable) when i left i took out a private pension as well , just out of interest i looked at transferring my measly pussers pension, having weighed it up i eventually did , and can now retire at 50 with 10 times more than the mob was going to give me at 60(if i asked )i may have been lucky but its well worth a look .
 

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