Each month the Forces Pension Society produce a column inside Pathfinder magazine.
Here they explain how Benefit Information Statements work…
Pensions go some way to providing family financial security and it is a good idea to keep an eye on pension savings as they grow. One of the ways in which the Armed Forces Pension Scheme (AFPS) helps you with this is by issuing you with a Benefit Information Statement (BIS). This short article explains how the BIS works.
All serving personnel should receive a fresh BIS annually, shortly after their birthday. Following feedback from members, the MOD introduced a revised version of the BIS in May 2022, so those of you with birthdays after the date of the change will receive a much clearer account of your benefits. The new document provides clear separation of any Early Departure Payment (EDP) Scheme benefits and pension benefits, as well as wording it to remove the necessity for many foot notes that were so confusing on the old BIS.
The BIS provides a concise statement of pension earnings up to the date of issue, offering the opportunity to identify and correct any errors found in the underpinning data used to produce the BIS (so, dates, rank etc.). Non-receipt or data errors should be referred to Unit Admin staff.
The BIS is a snapshot of the pension/EDP as if the member were leaving service on their birthday that year and the spouse or civil partner benefits which would become payable if they were to die in service at that point. It separates the benefits so that it is clear which benefits result from which scheme, and when they are payable.
It does NOT show benefits transferred in from other schemes, the value of any Added Years or Added Pension purchased, or the impact of divorce-related orders on the pension.
Further, it does not mention the benefits payable for dependent children or unmarried partners. These are omitted to keep the BIS simple. To cover everything would make the document too complicated and discourage the owner from reading it!
The revised BIS is a welcome improvement, but it is not the full picture and should not be used for financial planning. So, what else is available?
Well, there is the MoD on-line pension calculator, but its accuracy depends entirely on the data that is input and it, too, has some limitations. For example, it will assume that the rank for pension is the rank that it has been told the member holds – which, of course, for AFPS 75 members may not be the same as ‘rank for pension’. Further, it cannot deal with split service, transfers in, Added Pension, Added Years or Pension Sharing Orders.
Then there is the formal pension forecast. This calculates benefits using the actual data as held by DBS and the actual rules of the scheme(s) in which benefits have been accrued. Everybody is entitled to one free formal pension forecast a year and it is obtained by submitting an AFPS Form 12 (while still serving) or an AFPS Form 14 (once discharged) to Veterans UK in Glasgow. Again, when you receive your forecast, check it – errors can occur.
If you are a member and have pensions questions, email us at email@example.com. If you are not a member but would like to know more about us, visit www.forcespensionsociety.org.
Author: Mary Petley, written for the September issue of Pathfinder 25/08/2022