The LGPS offers the facility to transfer previous pension rights into the scheme, whilst also the availability to transfer your LGPS pension benefits elsewhere, below are some pointers to consider
Thinking of transferring in a previous pension?
You may be able to transfer pension rights into the LGPS from:
- a previous LGPS fund
- a previous employer's pension scheme
- a self employed pension plan
- a pension 'buy-out' policy
- a personal pension plan
- a stakeholder pension scheme
- an Additional Voluntary Contribution (AVC) arrangement
In some cases pension benefits from an overseas pension scheme can be transferred into the LGPS.
It is not possible to transfer a pension credit into the LGPS. A pension credit is a share of an ex-spouse's, or ex-civil partner's, pension benefit that can be awarded to by a Court under a Pensions Sharing Order following a divorce of the dissolution or a civil partnership.
The Clwyd Pension Fund are not liable to provide advice upon any transfers. As transferring your pension rights is not always an easy decision to make, and you may wish to seek the help of an independent financial adviser.
How do I transfer in?
You have only 12 months from joining the LGPS to opt to transfer your previous pension rights, unless your employer and your administering authority allows you longer. This is a discretion and you can ask your employer and what their policy is on this matter.
How do I transfer out?
If you have left the LGPS and are joining another pension scheme, you may wish to consider transferring your LGPS benefits to it. You can even transfer your LGPS pension to an overseas pension scheme provided that it meets certain conditions set by HM Revenue and Customs.
You cannot transfer your benefits if you leave less than one year before your Normal Pension Age. An option to transfer (other than in respect of AVCs) must be made at least 12 months before your Normal Pension Age.
If a full transfer payment is made, you will not be entitled to any further benefits from the LGPS for yourself, your spouse, civil partner, eligible cohabiting partner or eligible children.
What to consider?
If you are considering whether to transfer benefits, make sure you have full information about the two pension arrangements i.e. details of what your benefits are worth in the LGPS and details of what your benefits would be worth in the new pension scheme, if you transfer there. When you compare your options, don't forget that your LGPS benefits are guaranteed to increase in line with cost of living increases.
Transfers to public sector schemes usually give benefits that are broadly equivalent to those in the LGPS, under what are known as Club transfer rules provided you apply for the transfer within 12 months of joining your new pension scheme and have not had a break in membership of more than 5 years between leaving the LGPS and joining the new public service pension scheme.
However, transferring your pension rights is not always an easy decision to make and you may, therefore, wish to seek the help of an independent financial adviser before you make a decision. This is particularly important if you are considering transferring your deferred benefits to a personal pension plan, stakeholder pension scheme, buy-out insurance policy or to an employer's money purchase scheme, as you will be bearing all of the investment risk which could significantly affect your future pension benefits.
You can only transfer benefits from the LGPS if you have left the scheme and you have not already drawn benefits from the LGPS (either in your current employment or any earlier employment). Also, if you hold more than one deferred benefit in the LGPS in England and Wales (either in the same or separate LGPS pension funds), you will be required to transfer all or none of the benefits you hold. It is not possible to transfer one deferred benefit whilst retaining another deferred benefit in the LGPS.