To ask His Majesty's Government what assessment they have made of the potential for recent increases in interest rates to provide them with an opportunity to address the Ministry of Defence’s historical pension liability.
Answered on
2 August 2023
The Armed Forces Pension Scheme (APFS) is, like the majority of public service pension schemes, an unfunded scheme. As with all unfunded pension schemes, they are paid for only by the taxpayer and have no cash or investments to fund pensions in payment or past liabilities. As such, increases in interest rates will not reduce the Ministry of Defence (MOD)'s historical pension liability for the AFPS, which is driven by the SCAPE (Superannuation Contributions Adjusted for Past Experience) discount rate and other assumptions set by His Majesty's Treasury and MOD.