Transferring your pension benefits
Keeping things simple
Rather than managing multiple pensions, it’s sometimes easier to transfer the benefits from a previous plan into your current scheme. Obviously, it needs to make sense financially, but if the idea of one point of contact is appealing, it’s an option well worth considering.
Which pensions can be transferred?
The rules often vary, but in theory, you can transfer your benefits from any of the following schemes:
- A previous pension in England or Wales
- Any other public service pension scheme
- A personal or stakeholder pension plan
- An Additional Voluntary Contribution (AVC) pension
- Some overseas pension plans
Which pensions can’t be transferred?
We can only accept transfers from HMRC approved pension schemes (any that aren’t approved by HMRC cannot be accepted for potential money laundering reasons). Plus, we are unable to transfer a ‘pension credit’ – a share of an ex-partner’s pension that has been awarded following a divorce or the dissolution of a civil partnership.
Is it in your best interest?
Transferring your pension benefits is a big decision that shouldn’t be taken lightly. Before you sign on the dotted line, you might want to consider the following questions:
- What is the Normal Pension Age (NPA) on both schemes?
If your new pension has a different NPA to your old one, it can have a positive or negative impact on your retirement income. Make sure it works in your favour before agreeing to the transfer.
- Was your previous pension a final salary scheme?
If you previously had a final salary scheme and your new plan is based on a career average salary, you should take a moment to work out which pension gives you the best annual income.
- Did your previous pension include an automatic tax-free lump sum?
If it did, be sure to check that this still applies with your new pension.
- Was your previous pension a money purchase / defined contribution scheme?
If so, such schemes are linked to the stock market, and a transfer to a LGPS, Police or Fire Services pension scheme removes that link (with both positive and negative outcomes a possibility).
If you are unsure what to do for the best, you may wish to speak to an independent financial adviser.
Understanding your options
Ensuring a smooth transition
Every pension plan is different. So, when you start your membership, we give you up to 12 months to decide whether to transfer the benefits from your old scheme. If you choose to go ahead, we just need you to complete our ‘new member declaration form’, which you’ll find in your welcome pack.
Public Sector schemes
Public sector pensions are usually very similar. If you decide to transfer or combine your benefits from a previous scheme, we simply contact the fund manager and ask them to send over your details. Once we’ve worked out the numbers, we let you know what your estimated pension scheme benefits would be. And if you wish to go ahead, we ask you to confirm it in writing.
Transfers from an LGPS fund (other than Police & Fire)
If you were already paying into an LGPS scheme (in England or Wales), we can often combine the benefits by what’s known as an ‘interfund transfer’. As long as it’s less than five years since you were an active member, your transferred benefits are calculated in the same way as when you earned them – with final salary benefits linked to any service before 1 April 2014.
Again, we contact your previous fund manager to request your details and then write to you with your options. If we don’t hear back by the date on the letter, we go ahead and combine the schemes.
Transfers to LGPS in Scotland and Northern Ireland are treated the same as Public Sector transfers.
Police & Fire schemes
If you are joining us from another constabulary or authority, there’s no need to complete any forms or request a pension transfer. We automatically combine your pension schemes when we hear from your employer and advise you of your new benefits in writing.
If you have pension benefits outside of the Police & Fire scheme, you should let us know by completing the ‘new member declaration form’. We would then contact your previous scheme and provide you with a quote.
Transferring from a private pension, or a pension scheme that isn’t a LGPS, Police or Fire Services pension scheme
Most non-public sector schemes will be money purchase arrangements where you build a pot of money that is used to buy a pension / annuity at your chosen retirement. If you choose to transfer such a pension into a LGPS, Police or Fire scheme, we would offer you a guaranteed annual pension, payable from your state pension age. The scheme would work in a very different way than a money purchase, with no exposure to stock market fluctuations.
Transferring your pension in six simple steps
Transferring your pension
Your employer contacts us
Your employer makes us aware that you have joined the pension scheme.
We send you a form
We provide you with a welcome pack and member declaration form.
You return the form
You complete and return the form within 12 months.
We contact your previous provider
We contact your previous pension provider and (if the schemes are compatible), ask the for the value of your benefits. If it’s a previous LGPS, Police or Fire Services scheme, we simply link the records.
We send you our offer
We write to you with an offer.
You confirm you’re happy with the offer
You complete the enclosed form and confirm that you wish to go ahead. For LGPS schemes, in some cases if you don’t respond by the deadline on the letter, we will automatically link your benefits.