§ Mr. Gerald HowarthTo ask the Secretary of State for Defence how many(a) prospective members of the proposed new Armed Forces Pension Scheme and (b) beneficiaries of the associated compensation arrangements he estimates will find the provision for them capped by a £1.4 million limitation on the total value of pension and related arrangements. [149153]
§ Mr. CaplinThe Ministry of Defence expects very few members of the new Armed Forces Pensions Scheme to be affected by the Government's proposed lifetime allowance of £ 1.4 million. Payments from the new Armed Forces Compensation Scheme are not retirement pensions for taxation purposes and are not therefore affected by the proposed allowance.
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§ Mr. Gerald HowarthTo ask the Secretary of State for Defence what the value of the pension provision through the proposed Armed Forces Pension Scheme, capitalised in accordance with the rules proposed by the Treasury, will be for(a) a senior warrant officer, (b) an officer retiring at normal retirement age at the rank of major or equivalent and (c) a four star officer; and if he will make a statement on the assumptions and calculations underlying the valuations. [149154]
§ Mr. CaplinThe figures are as follows:
£ 4* officer 1,518,000 Major (and equivalent) 493,000 Warrant officer 1 (higher) 418,000 The figures assume broadly mid-point 2003–04 pay rates, 35 years Service (some of which might be after normal pension age of 55) and the new pension scheme provision of a 50 per cent. pension after 35 years' Service. The pensions have been capitalised using the Inland Revenue formula of 20 times pension plus the lump sum, equivalent to three times the pension. Figures are rounded to the nearest £1,000. The formula used to capitalise pensions is subject to public consultation by the Inland Revenue.
§ Mr. Gerald HowarthTo ask the Secretary of State for Defence what arrangements he intends to make in relation to the Armed Forces Pension Scheme and compensation arrangements to ensure that, as the pay rates of the armed forces are increased over time to protect their real value, the full value of pension and compensation arrangements are not restricted by a cap on capitalised value fixed in cash terms. [149155]
§ Mr. CaplinThe Government propose to increase the proposed lifetime allowance annually by the Retail Prices Index. Like any other employer, the Ministry of Defence will keep this under review.