Outward transfer of your NPPS pension rights
If you leave or opt out of NPPS before pension age, you have a choice of options for your benefits. Your choice will generally depend on whether you are in the first three months of your police service and, if not, whether you have two or more years’ qualifying service.
If your police service plus any linked qualifying service (i.e. qualifying service brought across from another pension scheme through a transfer value) amounts to less than three months, then your contributions will be refunded.
If your police service plus any linked qualifying service amounts to three months or more, but your total qualifying service is less than two years, your choice is:
- A transfer out of your NPPS pension rights to another pension scheme, or
- A refund of your contributions.
If you have two or more years’ qualifying service (or if you transferred pension rights into the NPPS from a personal pension scheme) your choice is:
- A transfer out of your NPPS pension rights to another pension scheme, or
- A retaining deferred benefits within NPPS.
You may transfer your NPPS rights to:
- Another public sector pension scheme, or
- Any other pension scheme which is registered with HM Revenue and Customs (which can include a personal pension plan), or
- A qualifying recognised overseas pension scheme.
If you are opting out of NPPS while staying in the police, only the
second option is open to you.
The transfer payment will be in the form of a transfer value.
Example
An officer leaves the police service to move to the private sector. She has 15 years’ pensionable service in NPPS and is informed by her new employer that she will be able to transfer this to her new employer’s pension scheme. She knows that if she takes no action, she will be entitled to a police pension of 15/70 of her final salary, and an associated lump sum, when she is 65, which will be increased for inflation from the time at which she leaves the police service to her 65th birthday. The police authority, on request, will calculate the cash equivalent transfer value of her police pension rights and provide this information to her new employer. Her new employer will be able to tell her what pension benefits this will buy in their pension scheme.
The officer is then free to choose whether or not to transfer her police pension rights; this will be her own decision and the police authority cannot advise her as to what she should do. To transfer her police pension rights, she must give written notice to the police authority within six months of ceasing to serve as a police officer.
There are a number of points to consider before making a transfer:
- You must apply for a transfer payment within six months of leaving the police service or opting out of NPPS (this is extended to twelve months for transfers to a public sector scheme) – these time limits may be extended by the police authority at their discretion.
- You are not entitled to a deferred pension from NPPS if you received a refund of contributions – a transfer will be possible only if you repay the refund first.
- You will not be able to have a transfer if you are within a year of reaching the age of 65.
- The transfer value may not necessarily buy the same length of service in the new scheme – an estimate from the new scheme should provide an indication.
- The range and type of benefits offered by another scheme may be quite different from those offered by NPPS.
LPPA can provide an example of a transfer value calculation and more information about how NPPS arrangements work, but cannot give specific advice on individual cases.