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Transfers
Please note that transfers can be a lengthy process.
Transferring In
When you join the Clwyd Pension Fund, you have the opportunity to transfer your previous pension rights within the first 12 months of joining us. However, your employer has complete discretion to extend this 12 month deadline.
You can transfer previous pensions from:
- a previous LGPS Fund
- a previous employer's pension scheme
- a self-employed pension plan
- a buy-out policy
- a personal pension
- a stakeholder pension scheme
- a free standing AVC
The Transferring In process
1) The actual transfer process begins when you complete a Transfer Authority Form and return it to the Clwyd Pension Fund. To instigate the transfer process, please complete the ‘Transfer Authority’ form, including all relevant information of your previous pension provider, sign and date the form and return it to the Clwyd Pension Fund.
2) Upon receipt of this form, the Clwyd Pension Fund has the members authority to speak to your previous pension provider on your behalf.
3) The previous pension provider will calculate a Transfer Value of the benefits you hold with them and supply the Clwyd Pension Fund with a transfer value.
4) Upon receipt of this information, this is then converted into LGPS benefits to provide you with a quotation.
5) We will inform you in writing of the estimated value of the pension if it is transferred which will allow you to decide whether to proceed. Enclosed with this letter will be a pre-paid envelope and a ‘Transfer Option Form’ to notify us what you wish to do.
6) It is at this stage where you can agree or disagree to go ahead with the transfer.
a) If you wish to go ahead with the transfer please complete the ‘Transfer Option Form’ by ticking the appropriate box, signing and dating the form and returning it to the Clwyd Pension Fund.
b) You are not obliged to continue with the transfer if you feel it is not in your best interests to do so. If this is the case please complete the ‘Transfer Option Form’ by ticking the appropriate box, signing and dating the form and returning it to the Clwyd Pension Fund.
Transferring Out
If you are no longer making pension contributions, your benefits can be transferred out of the Clwyd Pension Fund at any time providing that your new employer/pension provider is willing to accept the transfer. You should check that your new pension provider will accept transfers and that you are within their given time restraints before requesting a transfer out of the Clwyd Pension Fund.
What do I need to do to instigate a transfer out?
You should contact your new pension provider directly to instigate the transfer by giving permission to speak to the Clwyd Pension Fund on your behalf. Your pension provider may have an online process or form which you need to complete to instigate the transfer.
Limitations to transferring out
You cannot transfer your benefits if you leave less than one year before your Normal Pension Age. Members must also make their final election for the transfer to proceed at least 1 year before their NPA.
This NPA is relevant to what membership you hold In the LGPS, if you have pre 31/03/2014 membership only this shall be your 65th birthday, however if you hold any post 01/04/2014 membership this shall be the highest of your state pension age or 65th birthday.
The Clwyd Pension Fund Process
Once the process begins, your new pension provider will require a transfer value quotation, which the Clwyd Pension Fund will guarantee for a period of three months from the date of calculation. Your new pension provider can then advise you of the additional benefits the transfer will buy in their scheme.
If you are considering whether to transfer benefits, make sure you have full information about the two pension arrangements; 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 transferred. When you compare your options, don’t forget that your LGPS benefits are guaranteed cost of living increases.
Advice
You may wish to take independent financial advice when making this decision as this is not available directly from the Clwyd Pension Fund. 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.
Please note that you will be required by law to take independent financial advice if the value of your pension benefits in the LGPS (excluding AVCs) is more than £30,000. You are not required to take independent financial advice if the value of your benefits is less than £30,000, however, transferring your pension rights is not always an easy decision to make and seeking the help of an independent financial adviser before you make a decision to transfer could help you in making an appropriate decision.
A transfer payment represents the cash equivalent value of your LGPS benefits at the time of the transfer. If a transfer payment is made, you will not be entitled to any further benefits from the LGPS for yourself, your spouse/civil partner, dependents nor co-habiting partner.
Club & Non-Club Transfers
The Transfer Club
The Clwyd Pension Fund is part of the LGPS, which is a member of the Public Sector Transfer Club, which is a network of public sector pension schemes that have agreed to pay and receive transfers on the same basis.
This means the transfer will provide membership credits of roughly equal lengths when you transfer between them, and shall generally be beneficial unless your pay reduces when you change jobs. However, if you are considering transferring in a pension, we suggest you contact a financial adviser.
We can only accept a request to transfer in under club rules if the request is received within a year of you joining the Clwyd Pension Fund in that individual employment.
Public sector pensions
If you have been in a public sector pension scheme before such as the Civil Service, the NHS, or the Teachers’ Pension Scheme, we will normally accept a transfer from them. Precisely how this will work depends on when you left that scheme.
LGPS
If you've been in the LGPS before and you have deferred benefits, there is often the opportunity to link these with your new benefits. In fact in many cases this will happen automatically, unless you choose to leave them separate.
The rules on this are complex, and the options available to you depend on how long you had been in the scheme, and how long ago you left. A detailed letter, calculation and information pack is sent out along with all our transfer quotes, to explain each individual case separately.
How does a Club transfer work?
The transfer value calculation is generally the same as for a non-Club transfer. The difference is that the new Club scheme works out the service credit using a set of standard tables that all Club schemes use.
The Club arrangements also require the new scheme to use the member’s salary in the old scheme when working out the service credit, regardless of any increase on moving. When someone transfers between two schemes with identical provisions, the transfer should produce a year-for-year credit. Where the scheme provisions differ, for example if they have different pension ages, a transfer might produce a higher or lower service credit.
How does a Non-Club transfer work?
When someone asks for a transfer of their pension benefits, the old scheme works out a transfer payment.
This is the cash value of the member’s benefits in their scheme. They base these benefits on the member’s final salary at the point of leaving and allow for increases up to retirement, usually in line with prices.
The scheme receiving the transfer payment must offer benefits of an equivalent value, but they base the service credit on the person’s salary in the new scheme. They also apply factors which allow for expected salary increases. So even when the two schemes are similar in structure, the result is generally a lower service credit in the new scheme. This is particularly so if the new job pays a higher salary.
Can you take a Club transfer into a scheme which provides ‘career average’ benefits?
Some pension schemes provide benefits on a career average basis – typically, the member will earn a pension based on a percentage of their earnings each year, up-rated annually in line with prices. Career average schemes may still belong to the Club provided they are able to accept a Club transfer in on a final salary basis.
If you were to bring a Club transfer into such a scheme, that transfer would buy you a service credit in the same way as any other Club transfer. When you left that scheme, the service credit would be used to provide you with benefits based on your final salary in the scheme. However, your benefits actually earned in the scheme would be worked out on a career average basis.
If you were to transfer out again to another Club scheme, your final salary based benefits would be transferred on Club terms, and the career average benefits transferred on non-Club terms.
What are the time and age limits for applying for a Club transfer?
You must apply for a ‘transfer in’ within 12 months of joining your new Club scheme. If your employer offers a choice of scheme, you must apply within 12 months of being eligible to join the Club scheme. Subject to the above time limits, a Club transfer will normally be available until you reach the pension age of the sending scheme.
However, schemes may impose other time limits which affect your right to a Club transfer value when you do not have preserved benefits. You should check this with the administrators of your old scheme. The 12-month time limit ensures that receiving schemes are not obliged to accept unreasonably large liabilities at some point in the future.
Club arrangements only apply if you leave one Club scheme by resigning voluntarily and take up separate employment, joining another Club scheme.