Select Committee on Defence Appendices to the Minutes of Evidence


APPENDIX 7

Memorandum from the Officers' Pensions Society (14 September 2000)

REFERENCES

  A.  Defence Committee Press Notice No 17, dated 29 June 2000.

  B.  The Armed Forces of the Future—A Personnel Strategy, dated February 1997.

  C.  Armed Forces Overarching Personnel Strategy, dated February 2000.

  1.  The Defence Committee's Inquiry intends to cover, inter alia, the effectiveness and appropriateness of the Armed Forces remuneration package of which pensions is a significant element. This Society has considerable experience of the practical implications of the Armed Forces Pension Scheme and its impact on both serving and retired Service personnel of all ranks and their dependants, and a history of constructive input to MoD pensions policy development. We would like to submit evidence to the Inquiry which we hope the Committee will find valuable.

  2.  At the invitation of the Minister of State for the Armed Forces this Society forwarded a comprehensive submission on 12 October 1998 to the MoD Review of the Armed Forces Pension Scheme (AFPS). This Review has yet to come to its provisional conclusions or to consult widely as promised, but we remain willing and eager to contribute constructively.

  3.  In the intervening two years this Society has watched developments with care. We noted with pleasure the Government's announcement in July this year that from this Autumn attributable widows' pensions would be payable for life and no longer withdrawn on remarriage, and that similar treatment for all widows would be a main recommendation of the long awaited MoD Pension Review: we have campaigned long and hard for this. On the other hand, having exhausted all domestic processes, we have lodged a case on behalf of our members at the European Court of Human Rights (ECHR) on two other serious inequities concerning widows' pensions (pre 1973 one third rate widows' pensions and post retirement marriages) and we await a ruling on admissibility.

  4.  This Society's submission to the MoD Pension Review identified all these issues and others as serious inequities which must be corrected, and many other measures designed to ensure that weaknesses are not perpetuated and that the new AFPS emulates as far as possible best practice in the public and private sector. That submission remains entirely relevant and I enclose a copy of the main discussion document with a supporting annex and 17 explanatory appendices for consideration by the Committee.

  5.  In doing so, we keep firmly in mind the statements contained in two References cited at the head of this letter. In the previous Administration's "Personnel Strategy"—Ref B—Chapter 5 looked at the need for a pension scheme review, noting that it would need to take into account:

    ". . . the relative inflexibility of the current arrangements, and the fact that they are out of line with other pension schemes in the public and private sectors"

  The current Administration's "Personnel Strategy"—Ref C—notes in its Personnel Strategy Guideline No 26 that a principle of its Pensions Policy should be:

    ". . .to provide a pension scheme for the Armed Forces that reflects modern standards and is consistent with the legitimate expectations of Service personnel."

  6.  In our view the current AFPS falls well short of modern standards and contains several gross inequities which must be corrected. Anything less will perpetuate injustices and continue to treat very shabbily many of our pensioners and their widows who have served their country loyally in peace and war; and will also not serve the Armed Forces well because a flawed pension scheme will act as a disincentive to recruiting and retention. It must also be of concern that as the MoD Review will no doubt have to work from an assumption of cost neutrality and that as pensioners are living longer, the chances of at least maintaining the current inadequate value of the AFPS let alone bringing it up to modern standards must be seriously in doubt.

  7.  We would also like to draw the Committee's attention to the unique nature of the Armed Forces' commitment to their country, which is of an entirely different and more demanding kind than that of any other group of public servants. Men and women in the Armed Forces have an unlimited liability; are required to use and have used against them violent force as an essential part of their role; surrender many of their freedoms under a further code of discipline; have a reserve liability; and rely entirely on the Government as their employer for fair treatment with no independent representation. Their dependants are also affected by many of these factors with massive disruption to housing, schooling and careers which place their long term future in jeopardy. In our view this puts servicemen and women and their dependants in a unique category and deserving of unique treatment in regard to their pension provision. The argument that Armed Forces' pensions must be in line with the generality of public servants really must not be allowed to prevail any longer.

  8.  Our Chairman and Council ask the Committee to consider this evidence with care, and are of course ready to attend any session of the Inquiry or to submit further evidence as required.


 
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