Transferring deferred benefits to another scheme
We will look after your deferred benefits until you retire. Alternatively, you may choose to transfer your deferred benefits to another scheme. This page provides information about the transfer process and the things you need to consider before proceeding. This page is not suitable if you are looking to transfer your deferred benefits to another LGPS Fund. Please see Combining LGPS accounts.
The short video on the national LGPS member website explains some of the key things to think about when considering transferring your LGPS pension benefits.
Eligibility to transfer
You won’t be able to transfer your deferred benefits if:
- you are still paying into the LGPS
- you have an LGPS pension already in payment
- you have reached your Normal Pension Age (NPA) or are within one year of your NPA
Your NPA is the date your deferred benefits can be paid without reductions. You can find this date by viewing your latest Annual Benefit Statement in your My Pension Online account.
Your new pension provider must also meet certain legal requirements for a transfer to take place. We will check this when we receive a transfer request.
If you are not transferring your LGPS pension benefits to either a public service pension scheme, a Collective Defined Contribution or a Master Trust Scheme approved by The Pension Regulator, your application to transfer will be assessed for any signs of a scam. If serious concerns about pension scams are found, you will lose your statutory right to transfer.
If you have more than one LGPS account
If you have more than one LGPS account, you must transfer all of them at the same time, even those held at other LGPS funds. If you wish to transfer, you should notify us of any other LGPS accounts that we don’t know about by completing a membership form. We will need to liaise with other funds to complete the transfer process.
If you wish to transfer to another LGPS fund, the process is different. For more information, see Combining LGPS accounts
If you hold a refund account
If you hold a refund account because you paid into the scheme for more than 3 months and less than 2 years, you can transfer this to another pension provider. Once we provide you with a transfer value, you must confirm that you wish to transfer within three months, or you will lose your entitlement to do so. If you wish to transfer, you must do so within 5 years of leaving the LGPS. Otherwise, we will need to pay you a refund of contributions.
If you hold a refund account and you have re-joined the LGPS, the process is different. For more information, see Combining LGPS accounts
If your pension pot is over £30,000
We recommend that you take independent financial advice, whatever the value of your pension pot(s). However, if the total value of your pension pot(s) is over £30,000 and you want to transfer your deferred benefits to a flexible benefit scheme (i.e. a money purchase scheme or a defined contribution scheme), you are required by law to seek independent financial advice.
We will request evidence of this before we pay a transfer. We will also check that the financial advisor is suitably qualified to provide advice on defined benefit pensions. Members transferring out will also be asked to confirm that they are aware that they are giving up a valuable retirement income for themselves and their dependents.
If your new pension provider is a member of the public sector club, then your transfer out will be subject to club rules. In a nutshell, club rules ensure that you won’t be worse off if you transfer, although there are some circumstances where this will not be the case. You can check if your new pension provider is a member of the public sector club by viewing the participating scheme’s list. Club schemes include the Civil Service Pension Scheme, NHS Pension Scheme and the Police Pension Scheme.
If you are transferring under club rules, you must do so within 12 months of joining the new scheme. You must not have had a break in service of 5 years or more between leaving one club scheme and joining another. You may still be able to transfer after this time, but club rules won’t apply. You can find more information on the public sector club scheme on the civil service pension website.
New club transfer guidance came into force on 1 October 2023. Any club transfers occurring after this date will be calculated under the new guidance.
The transfer process step by step
When you transfer out, we need to liaise with you and your new pension provider and if you are transferring to a defined contribution scheme, we will need to perform certain additional checks. The process can take quite a few weeks. You should make sure you allow enough time if you have any pressing time constraints.
Step 1: Check your new pension provider will accept the transfer
If you’re thinking about transferring out, you should contact your new pension provider first and check they would be able to accept the transfer. Some schemes have time limits on when you can transfer in.
If the scheme is a club scheme, you should also check that it can be paid on a club basis. Some schemes may deal with the transfer on your behalf if you give them signed permission. This is called a letter of authority and we will ask for a copy of this before dealing with any other scheme on your behalf.
Step 2: Request a quote from us
If you are able to transfer out of the scheme, we will provide you with 1 free Cash Equivalent Transfer Value (CETV) in a 12-month rolling period. This is a calculation that you can take to your new pension provider and it is guaranteed for three months.
Your new pension provider will use the CETV to tell you how much your deferred benefits would be worth in their scheme. We will also provide you with any forms which we will need completing. If you wish to transfer, you would need to provide all required documents within three months of the guaranteed date shown on the CETV.
Some important things to note about the CETV :
- the CETV is based on factors provided by GAD (Government Actuary’s Department) and this guidance can change. If it changes before the transfer completes, it could change the transfer value
- if you do not reply by the deadline, we will assume you do not wish to proceed, and you would need to wait 12 months before you are able to receive a further free CETV
- if you do not wish to wait 12 months to receive a further CETV, and you are entitled to it, we can supply this to you at a fee of £150 plus VAT
- your entitlement to transfer out and the amount shown on the attached CETV, is only guaranteed until the deadline. If you apply for a CETV at a later date, we would need to reassess your entitlement and, if you are deemed to be entitled to it, recalculate the CETV, which may change the transfer value
Step 3: Make an informed choice
Once your new or prospective pension provider has given you a quote of how much your deferred benefits are worth in their scheme, you should compare it with the current value of your deferred benefits and decide if you want to transfer or not. It’s important that you carefully consider the implications before you proceed. You also need to ensure that you have taken steps to avoid a pension scam.
We recommend that you seek independent financial advice before making any decision about your pension benefits. For more information, see Get help with decisions about your pension
If the value of your pension pot is over £30,000 and you are transferring to a defined contribution scheme, you will be required to do this by law. The LGPS is a defined benefit scheme and a statutory scheme. You receive pension benefits defined by the LGPS regulations that are not dependent on stock market performance and are payable for life. Take a look at Benefits of joining the LGPS and make sure you are happy to give these up.
More information about the difference between defined contribution and defined benefit schemes, an be found on the Money Helper website.
Never transfer until you have had a quote from your new provider, and you have analysed your options thoroughly. Never be tempted to rush the decision.
You may also wish to consider any potential tax implications or additional charges that may be payable to your new provider. There is no charge for transferring deferred benefits out of the LGPS.
Step 4: Complete the relevant paperwork
If you decide that you do not wish to proceed, or we don’t hear back from you after providing you with the CETV, we will consider the matter closed.
If you do wish to transfer, we will need all the forms completed fully. Some of the forms will need to be completed by you, and some of the forms will need to be completed by your new pension provider.
Due diligence checking
Once we receive your request to proceed with the transfer, we will need to carry out certain checks which aim to protect you from pension scams before we can pay the transfer.
Unless you hold a refund account we will need check your application meets one of the two conditions set out in the Personal and Occupational Pension Scheme (Conditions for Transfers) Regulations 2021. The first condition is that you are transferring to either a public service pension scheme, or a Collective Defined Contribution or Master Trust Scheme approved by The Pension Regulator. If you do not meet this condition, your application will be assessed under the second condition. We will write to you to confirm this and request any additional information we require.
To meet the second condition, we will carry out checks for warning signs of a pension scam known as ‘amber flags’ and ‘red flags’. An ‘amber flag’ indicates a moderate risk of a pension scam. If we have reason to believe one or more ‘amber flags’ are present, you will be required to take a free mandatory pension guidance session with MoneyHelper before we can progress your application.
If we have reason to believe any ‘red flags’ are present, we will not be able to progress the application any further.
If you are transferring out the value of a refund, the conditions above will not apply. However, we will still carry out due diligence checks to confirm the legal requirements have been met for a transfer to go ahead, and to ensure we have enough knowledge to warn you about a potential pension scam.
To complete these checks, we may need to speak to you on the telephone, and we may also request that you or your new pension provider supply us with more information. We cannot continue with the transfer until this process is completed. Buckinghamshire Pension Fund has taken a pledge to help combat pension scams, find out more about what this means in the section below.
Due diligence checking is a necessary part of the transfer process to ensure that we have done all we can to help you avoid a pension scam.
Additional Voluntary Contributions (AVCs)
If you have AVCs, you can choose to transfer your AVCs with your main LGPS benefits, choose to transfer these separately, or leave them where they are. Before you can transfer your AVCs, we may offer to book you a free Pension Wise appointment. Pension Wise is a government service from MoneyHelper that offers free, impartial pensions guidance about your defined contribution pension options.
If you don't want to take up the Pension Wise appointment, you can choose to opt out, however, we will need to get confirmation of this from you before your AVC fund can be released as we are required to do this by law.
You will be exempt from these requirements if the following applies:
- you are under age 50
- you are not transferring to access flexible benefits
- you have already received or opted out of receiving Pension Wise guidance
- the receiving scheme is registered with the Financial Conduct Authority (FCA)
We also perform due diligence checking to AVC transfers to ensure we do not find any warning signs of a scam.
Avoiding a scam
Each year life-long savings are stolen by pension scammers. Make sure you know the signs of a pension scam so that you can avoid them.
For more information, see Avoiding pension scams