Select Committee on Defence Memoranda


APPENDIX 1

RETIREMENT OFFICER 18 YEARS (COMPULSORY BASIS)—LT COLONEL (LEVEL 5)

  Age at retirement = 40

  Service = 18 years

  Final Pensionable Salary = £53,888.60

  Representative Pay = £53,255.21

  Under both the proposed scheme and the existing scheme, such a member is entitled to take an immediate unreduced pension as follows.


Pension Scheme Benefit
Existing
Arrangements
Proposed
Arrangements


Pension (£ p.a.)
£16,360 £13,857
Spouse's Death in Retirement Pension (£ p.a.) £8,180£6,929
Lump Sum (£)£49,080 £41,571
Capitalised Value of Benefits (to nearest £1,000) £356,000£302,000



  * This level of pension assumes that the Services decided that they no longer required the individual's services—it is paid at the accelerated accrual rate used for the Officer Immediate Pension point. If the individual had left voluntarily, his pension would have been paid at the premature voluntary retirement (PVR) accrual rate, which, at £14,820 per annum, is lower. Other benefits would also be lower if the individual left under PVR. This example aims to demonstrate, therefore, the effects of the difference in the accrual rates and timing of the Immediate Pension point for Officers.

RETIREMENT OFFICER, 28 YEARS (COMPULSORY BASIS)—LT COLONEL (LEVEL 5)

  Age at retirement = 50

  Service = 28 years

  Final Pensionable Salary = £53,888.60

  Representative Pay = £55,666.141

  Under both the proposed scheme and the existing scheme, such a member is entitled to take an immediate unreduced pension as follows.


Pension Scheme Benefit
Existing
Arrangements
Proposed
Arrangements


Pension (£ p.a.)
£23,287 £21,555
Spouse's Death in Retirement Pension (£ p.a.) £11,644£10,778
Lump Sum (£)£69,861 £64,666
Capitalised Value of Benefits (to nearest £1,000) £502,000£464,000


RETIREMENT OTHER RANK 22 YEARS—SERGEANT (LOWER PAY SPINE, LEVEL 4)

  Age at retirement = 40

  Service = 22 years

  Final Pensionable Salary = £24,356.45

  Representative Pay = £25,214.20

  Under both the proposed scheme and the existing scheme, such a member is entitled to take an immediate unreduced pension as follows.


Pension Scheme Benefit
Existing
Arrangements
Proposed
Arrangements


Pension (£ p.a.)
£8,026 £7,655
Spouse's Death in Retirement Pension (£ p.a.) £4,013£3,827
Lump Sum (£)£24,079 £22,965
Capitalised Value of Benefits (to nearest £1,000) £168,000£160,000


RETIREMENT OTHER RANK 32 YEARS—SERGEANT (LOWER PAY SPINE, LEVEL 4)

  Age at retirement = 50

Service = 32 years

  Final Pensionable Salary = £24,356.45

Representative Pay = £25,214.20

  Under both the proposed scheme and the existing scheme, such a member is entitled to take an immediate unreduced pension as follows.


Pension Scheme Benefit
Existing
Arrangements
Proposed
Arrangements


Pension (£ p.a.)
£10,828 £11,134
Spouse's Death in Retirement Pension (£ p.a.) £5,414£5,567
Lump Sum (£)£32,484 £33,403
Capitalised Value of Benefits (to nearest £1,000) £222,000£228,000






 
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Prepared 14 March 2002