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Pension Reform in the Armed Forces

Submitted by on 13 Sep 2011 – 16:48

Major General John Moore-Bick CBE DLMajor General John Moore-Bick CBE  DL, General Secretary for Forces Pension Society and Lieutenant Commander David Marsh RN

Over two hundred outings among the serving Armed Forces community give us at the Forces Pension Society a very sound base to experience the uncertainty, the sapping of morale, and the anger at the general public’s incorrect perception of Armed Forces pensions.

I doubt if anybody joins the Services for the pension, but as careers progress, or in a few cases are prematurely, often tragically, terminated, so the pension promise becomes more and more important in personal and family life. Rumours abound, especially among those longer serving men and women in the sergeants’ and petty officers’ messes and among those commissioned from the ranks. We have no doubt that the leaders of the Services are acutely aware of what is going on and we work closely with them, as we try to do with the MOD generally. Quite simply, the oft-repeated charge of ‘gold plating’ cannot conceivably apply to service men and women, the majority of whom have endured trying and disruptive family and domestic circumstances.  Our call is that we get back off the polemics and look at the very modest pensions which are in payment now and which, in some cases, will be even less in the future.  Payments like the average of an Armed Forces widow, who could well lose it on remarriage, of £2875 a year, £55 a week.  Gold plated?

Enough, you get my drift, no doubt.  Amongst the many other changes which the Armed Forces face, and they do face very many, including being at war, we cannot afford to have pension worries among them.

We appreciated the Prime Minister’s response to us last November, seeking a constructive partnership, and we welcomed Lord Hutton’s report. Both give us the solid foundation to work in that constructive partnership with defence ministers, foremost in this area, our Minister for Defence Personnel, Welfare and Veterans, the Rt Hon Andrew Robathan. We see, at last, an opportunity to restore the confidence of the Armed Forces in their pension schemes and in the fair and competent governance of those arrangements.

Transparency means the proper and free flow of information from Day 1 of service: and a clear statement for all Service men and women of their pension accrued, on pay statements.  We manage to show every other addition and deduction on a monthly basis, why not that?  We see no inherent threat in career averaging, but we are nervous about the accrual rates being talked of – is 1/100th just an opening bargaining ploy? If it is then let’s move on quickly to something practical and reassuring.  At the moment we are losing time as we wait for a common approach to mature by the Treasury across all schemes.

We simply can’t afford to wait now and then try to shoehorn the creation of a new pension scheme into the closing years of this Parliament.  We not only face the design of a new scheme; at the same time a whole new way of life and service is under consideration, to give more choice in personal and family life.  Career breaks, house ownership, mobility and stability are all on the agenda, creating a new model for defence by 2020.  The next pension scheme will endure until 2080 or later, so it must be thoroughly prepared .

The repeated calls for reduction of staff in the Ministry of Defence have left the personnel area too thinly staffed and the man and woman power available for the task of designing a new scheme is half as strong as it was last time and is being expected to do it in half the time.  So we will help with our expertise to the fullest degree, but we will not stand by should the tempo of the electoral timetable start to influence future pension plans unfavourably.

The Armed Forces deserve the best arrangements in the public sector.  They rightly enjoy that at the moment, and deserve equal treatment in the future. We in the Forces Pension Society exist to ensure that their case is properly represented, for the very long term of pension timescales, despite the immediate and hopefully, short term financial challenge.

This is also a crucial part of the Armed Forces Covenant, which enjoys cross-party support. We trust that the present government will live up to its promise on behalf of our people to give appropriate recognition to our Armed Forces as the next pension scheme evolves.