Transferring Former Pension Rights into the LGPS

Transferring benefits from another Public Sector pension scheme

Public Sector pension schemes operate transfers of pension rights under what is known as "The Public Sector Transfer Club". The Club consists of a number of final salary occupational pension schemes that have agreed reciprocal transfer arrangements thereby providing members with the opportunity of transferring their benefits on special terms. In general, if you transfer benefits between Club schemes you will receive a broadly equivalent period of membership in your new scheme regardless of any increase in salary on moving.

Eligible private sector pension schemes can also participate in the Club providing they are a final salary occupational pension scheme, have full HM Revenue & Customs approval, they agree to comply with the club arrangements and they are contracted-out of the State Second Pension Scheme.

You must apply for a Club transfer within 12 months of joining the LGPS or such longer period as your employer may allow at their discretion.

Transferring benefits from another company, occupational or personal pension scheme

If you have former pension rights but not with the LGPS and not as part of another Public Sector Transfer Club scheme, you can still apply for those former pension rights to be transferred into the LGPS.

These transfers are often referred to as Non-Club transfers.

Further points to consider when transferring pension rights into the LGPS

Based on your current salary we will provide you with the value of LGPS benefits that will be purchased by transferring your former pension rights into the LGPS. Make sure that when comparing these benefits with the value of benefits that would otherwise be retained in your former scheme you are comparing these on a 'like for like' basis i.e. the benefits quoted by your former scheme also refer to the current value and not a value projected forward to your retirement age.
Your previous scheme may guarantee the amount of the transfer payable for a certain period (usually 3 months). If you do not transfer your former benefits into the LGPS within this guaranteed period your former scheme will re-calculate the transfer value payable which maybe more or less than previously quoted subject to market conditions.
If you have previous pension rights in more than one pension scheme and you elect to transfer each of those pension rights into the LGPS, as each transfer value is received the service credit provided by each subsequent transfer may be affected. This is due to the fact that when a transfer value is received one of the factors used to determine the membership that will be purchased in the LGPS is the date from which your benefits can be paid without reduction. By transferring in a period of membership from another scheme you may actually bring forward your earliest possible retirement date and that will change the way in which subsequent service credits are calculated.
If you have been a member of the LGPS for more than 12 months but your employer allows you to still transfer your former pension rights into the LGPS, your current pay figure will be used to calculate the service credit. This may mean that you receive less membership than you would have received had the transfer taken place within the first 12 months of joining the LGPS.
When calculating a service credit we also take into account your age and whether you have a husband, wife, nominated co-habiting partner or civil partner. These factors will all have an impact on the membership provided by a pension transfer.
You cannot transfer into the LGPS benefits from any scheme (including the LGPS) as a result of a pension credit received following a divorce or dissolution.

Summary

Having provided you with details of the benefits a transfer into the LGPS can provide, you may wish to seek independent financial advice before finally deciding whether or not to proceed with the transfer of your former pension rights.

There are many factors to consider and whilst we are able to assist you in understanding the process of transferring former pension rights into the LGPS we cannot advise whether to transfer or not.