MoD pension compliance failure leaves “Early Leavers” out of pocket
The latest AFPS Annual Report for 2024-25 shows, following a member complaint, that the pension scheme has not been meeting its obligations to Early Leavers (defined as those who served for more than three months but less than two years before leaving the Armed Forces). Since 2006, Early Leavers have not been notified of their pension rights.
Under the Pension Schemes Act (1993), since 2006 Early Leavers should have been notified of their right to either a refund of any employee contributions (eg: AVCs/Added Pension) if made, or of their right to transfer their pension benefit to another registered pension scheme. MoD’s failure to comply with the legislation means that an estimated 60,000 leavers departed without this information.
It leaves the MoD with a £40M liability and the task of contacting all those affected to advise them of sums owed to them. The MoD is now undertaking the task of confirming eligibility and delivering redress.
Forces Pension Society Chief Executive, Maj Gen Neil Marshall commented:
‘This is a most regrettable situation affecting a large number of former service people. The reasons for the MoD oversight are unclear to us at present. Equally unclear is the process which will be undertaken to correct the fault and any compensatory adjustments that might be offered.
“However, as you would expect, we at the Forces Pension Society will seek answers to our many questions and closely monitor the situation. We will provide regular updates on our website for all to access (forcespensionsociety.org).
“Given the seriousness of the failure, we expect the MoD to address and set out its proposals to correct the problem with some urgency.”
The Forces Pension Society is an independent, not-for-profit organisation that provides pension guidance to those serving and retired, across all three services, and represents the pension interests of the whole military community. Last year, the Society’s expert Pensions Consultants dealt with almost 30,000 pension enquiries. Membership of the Society is growing and numbers more than 66,000. For further information visit forcespensionsociety.org