§ Lord BachMy honourable friend the Parliamentary Under-Secretary of State for Defence (Mr Ivor Caplin) has made the following Ministerial Statement.
During Standing Committee consideration of the Armed Forces (Pensions and Compensation) Bill in February, concern was expressed that the Government should provide more independent oversight of the arrangements provided for the Armed Forces in this area. I made clear to Committee members that I recognised the intent behind these concerns and we have considered how we might respond. We have now decided that we will give the independent Armed Forces Pay Review Body (AFPRB) a role in externally validating the provisions of the Armed Forces Pension Scheme (AFPS). We plan that this will be done in the context of their quinquennial valuation of the AFPS, though more frequent examinations of the scheme provisions could be undertaken if wider developments justified this.
The broad intent is that the AFPRB would compare the scheme provisions with practice elsewhere in the economy and consider the extent to which they meet the recruitment and retention needs of the Armed Forces. The review body's observations would then be made public in a supplement to the following annual report and the government would also make public its response to these observations. I am pleased to say that the chairman of the review body and his colleagues have agreed to take on this additional responsibility and we are now in discussion on the detail to determine the timing of the first such review. I am confident that this change will provide for more independence in reviewing the terms of the AFPS while equally helping us to ensure coherence across the broader remuneration package, comprising both pay and pensions. It should also provide additional reassurance for Service personnel by ensuring effective independent validation of the appropriateness of the pension provisions for our Armed Forces.