Transferring your benefits to another Scheme

Contents

  1. Overview
  2. Restrictions on transferring your benefits
  3. Pension Freedom and Choice
  4. Beware of pension scams

Overview

As long as it is more than one year before your Normal Pension Age, you can usually transfer your benefits in this Fund to another approved provider, including those offering the new flexibilities from Freedom and Choice.

If you are considering transferring your benefits you should note that:

  • You will first need to request a transfer value from us. You will be under no obligation to transfer
  • We will only accept the initial request directly from you and not from a third party on your behalf
  • We are only required to provide one transfer value within a period of 12 months

Restrictions on transferring your benefits

Please note that you can only transfer your LGPS benefits if you elect to do so at least 12 months before your Normal Pension Age (NPA). Your NPA depends on when you were a member of the Scheme or when you left the Scheme.

  • the NPA for a member who leaves after March 2014 in the LGPS in England and Wales is equal to the member's State Pension Age (with a minimum of age 65), apart from members who are subject to the underpin (for whom the NPA is, in effect, 65)
  • the NPA for a 1st October 2006 to 31st March 2014 leaver in the LGPS in England and Wales is age 65
  • the NPA for a pre 1st October 2006 leaver in the LGPS in England and Wales is:
    • 1) in the case of a member who by 60th birthday has a total period of membership of at least 25 years, that birthday; or
    • 2) in the case of a member who first has such a total period of membership by a date after his 60th birthday but before his 65th birthday, the day after that date; or
    • 3) in the case of a member who does not fall within paragraph (i) or (ii), his 65th birthday.

Additional transfer restrictions: (due to historic links between the State Pension and LGPS)

  • a female member of the Scheme who has membership prior to 5 April 1997 cannot make an election to transfer her pension benefits on or after her 59th birthday, or;
  • a male member of the Scheme who has membership prior to 5 April 1997 cannot make an election to transfer his pension benefits on or after his 64th birthday.

Pension freedom and choice

On 6 April 2015 the Government introduced greater flexibility for pension savings in defined contribution schemes. These apply to individuals aged 55 and over and are known as Freedom and Choice.

Most of the changes do not affect how you can take your benefits from the LGPS. The changes are targeted at defined contribution schemes, such as personal pensions and some company pension schemes. Your LGPS is not this type of Scheme, instead it is a defined benefit scheme.

However, there are some indirect changes that will impact on members of the LGPS who are considering transferring their benefits from the LGPS to a defined contribution scheme.

If you are considering transferring your LGPS benefits to a defined contribution scheme you will have to provide evidence that you have sought and obtained independent financial advice from a qualified advisor, where the value available for transfer is £30,000 or more. The advice will be at your own cost.

Further information on this can be found in Freedom and Choice - Transfers from the LGPS to Defined Contribution Schemes Q&A leaflet, which can be found at Freedom and Choice - Q&A for Member (PDF). 

Beware of pension scams

If you are considering transferring your LGPS benefits you need to guard against Pension Liberation Fraud also known as Pension Scams. Certain companies are approaching savers and claiming that they can help them cash in their pension early. Cash incentives or pension loans are sometimes being offered and the information provided on benefits and tax bills can be misleading. Also, significant tax penalties can apply to those who transfer and access benefits under age 55.

Pension scammers are targeting people like you with the average victim losing £91,000 each. 

Scams are hard to spot and are often disguised with credible websites, testimonials and materials which make them look like the real thing.

To help you spot the signs and protect yourself from a scam, the Financial Conduct Authority (FCA) and The Pensions Regulator suggest following four simple steps.

Step 1 - Reject unexpected offers
If you're contacted out of the blue about a pension opportunity, chances are it's a scam. Pension cold calling is illegal and you should be very wary. An offer of a free pension review from a firm you've not dealt with before is probably a scam.

Step 2 - Check who you're dealing with
Search ScamSmart and check the FCA's register to make sure anyone offering you advice is authorised. If they are, check they're permitted to give pension advice by calling the FCA Consumer Helpline on 0800 111 6768.

If you don't use an FCA-authorised firm, you risk not having access to compensation schemes.

Step 3 - Don't be rushed or pressured
Take your time to make all the checks you need - even if this means turning down what seems to be an 'amazing deal'.

Step 4 - Get impartial information or advice
You should seriously consider seeking financial advice before changing your pension arrangements. In some cases, for example where you are wanting to transfer more than £30,000 from a defined benefit scheme, you must obtain this advice.

Consider using MoneyHelper which provides free independent and impartial information and guidance.

If you suspect a scam, report it

You can report an unauthorised firm or scam to the FCA using the online reporting form or on 0800 111 6768,

If you suspect a scam, report it to Action Fraud on 0300 123 2040 or at www.actionfraud.police.uk.

Be ScamSmart with your pension. To find out more, visitwww.fca.org.uk/scamsmart

Further guidance

We would encourage you to click the following links:

http://www.twpf.info/CHttpHandler.ashx?id=29703&p=0  - 'Scammed out of his Retirement' Leaflet

The Financial Conduct Authority also recommends that you watch the following video to make you aware of the standards that you should expect from an Independent Financial Advisor:

https://www.fca.org.uk/news/news-stories/fca-publishes-video-help-consumers-understand-pension-transfer-advice   

Please read the leaflet from Action Fraud and associated organisations Action Fraud - Pension Scams and visit the

Pensions Regulators website at The Pensions Regulator - Avoid Pension Scams

 

The Financial Conduct Authority have also published guidance on how to avoid pension scams FCA How to avoid pension scams which you may find useful as well as an online Warning List checker which may help you to identify possible investment and pension scams.