§ Mr. ConwayTo ask the Secretary of State for Defence if he will make a statement on the opportunities available to members of the armed forces for making additional voluntary contributions in order to enhance the benefits payable under the armed forces pension scheme.
§ Mr. NeubertThe armed forces pension scheme (AFPS) provides an excellent range of benefits which are already mainly at the limits allowed by the Inland Revenue for occupational pension schemes. Nevertheless where scope does exist for additional voluntary contributions (AVCs), in-scheme facilities have been introduced so that service men can, so far as is possible, bring their benefits up to Inland Revenue limits. Under these arrangements all service men can enhance the widow's/widower's pension and the death in service lump sum; service men with military salaries in excess of those upon which pension rates are based can enhance all their AFPS benefits; and late entrants to the services can buy added years. MOD is prepared to issue certificates where appropriate to those wishing to make free standing AVCs (FSAVCs) for the same range of benefits.
I am pleased to say that it is now also possible for some service men to make FSAVCs in respect of additional pay which they might be receiving.
Additional pay in the armed forces does not readily lend itself to AVC purposes because most of it is unpredictable in incidence and discontinuous or short term. There are also wide variations in the amount of money involved. Provided certain criteria are fulfilled, however, some service men could benefit and in these circumstances MOD is now prepared to certify applications for FSAVCs.
I believe that these facilities provide opportunities for members of the AFPS which are as far as possible in line with those envisaged for other occupational pension schemes in keeping with the spirit of this Government's recent legislation.