§ Mr. Laurence RobertsonTo ask the Secretary of State for Defence what the reasons are for the abatement of pensions under Armed Forces Pension Scheme rules; on what grounds those rules are applied for those in full-time reserve when contributions have been paid; and if he will make a statement. [168060]
§ Mr. Caplin[holding answer 23 April 2004]: Successive Governments have maintained the policy that the pensions of public servants who are re-employed in public service should be abated in certain circumstances: these include where an individual is re-employed by the same employer and where an appointment is made 724W under closed competition. The broad terms of this policy apply to all public service pension schemes, including the Armed Forces Pension Scheme (AFPS). Abatement avoids the position where a re-employed member could receive a higher income from public funds, taking account of pay and pension, than a colleague of the same rank, seniority and trade with whom he or she might work. It also provides a safeguard against the potential abuse of re-employment.
Members of the AFPS make no direct contribution towards the cost of their standard pension benefits. However, as part of is overall review of remuneration, the independent Armed Forces Pay Review Body (AFPRB) compares the value of benefits provided under the AFPS with those provided by comparator pension schemes in the civilian sector and makes an adjustment to pay to reflect any difference. At present the AFPRB makes a 7 per cent. abatement of comparator pay, and in particular take account of the fact that AFPS benefits accrue faster and are paid earlier than those of civilian comparators. This adjustment takes account of the overall terms of the AFPS which include arrangement, for the abatement of pension on re-employment in public service.