As a deferred member you have the option to transfer your Local Government Pension Scheme (LGPS) benefits to:
You may be moving to another job which provides a different pension scheme, or you may be looking into transferring your pension out to a different arrangement.
Transferring your pension out of the LGPS is an important decision and one that you should consider carefully. In many cases you must seek independent financial advice before committing to the transfer.
Video: Transferring your pension
This video explains transferring an LGPS pension to a defined contribution scheme, when to seek financial advice, the possible risks and pension scams. For subtitles select ‘CC’ (closed captions).
We can't advise you about whether transferring out of the LGPS is the right or wrong thing to do. The following information sets out some of the points to consider when you think about transferring.
Your pension in the LGPS is:
- secure for you
- secure for your family in the event of your death
- guaranteed
- protected against inflation
- not subject to investment risk
- may be accessible if you become too ill to work
- not subject to fees and charges
Moving to another job
If you are starting, or have started, a new job which doesn’t provide the LGPS as the pension scheme, you are likely to be joining another pension scheme. If this is the case, you might be considering transferring your LGPS benefits into your new scheme. You can transfer your pension to any other scheme as long as the new scheme is one approved by HMRC and the new scheme is willing to accept the transfer.
If you want to transfer your pension, you should tell your new scheme that you hold benefits in the LGPS. They'll contact us for a transfer value and let you know what the benefits are worth in their scheme. We’re required to provide this within 3 months of the request.
Your new employer or pension scheme will then work with you if you wish to go ahead with the transfer. The transfer value we provide will be guaranteed for 3 months from the date we send it to your new scheme.
If you decide that you want to go ahead with the transfer, they'll ask us to pay the transfer payment over to your new pension scheme. There may be time restrictions in place which you'll need to check with your new scheme as soon as you join.
Transferring to a private pension arrangement
The government introduced 'Freedom and Choice' in April 2015. This allows members of defined contribution pension schemes more freedom on how they take their pensions. The LGPS is a 'public sector defined benefit scheme', which means that the freedom and choice rules don’t apply to LGPS members.
As an LGPS member you can transfer to a defined contribution scheme to get the flexible benefits allowed under freedom and choice rules. You would be required by law to obtain independent financial advice where the cash equivalent transfer value (CETV) of your LGPS pension benefits is more than £30,000.
Although you aren’t required by law to get advice when your CETV is less than £30,000, it is advisable to do so.
Requesting a transfer value
In order to transfer you’ll need to request a transfer value from us. Your prospective receiving scheme or your financial advisor can also request this on your behalf. If the request comes from your financial advisor, we’ll provide the information directly to you to share with them.
You’re under no obligation to transfer after receiving this transfer value.
You're only able to request one free transfer value within a 12-month period. Any additional requests will incur a charge.
Additional Voluntary Contributions (AVCs)
An AVC fund that is linked to an LGPS deferred benefit can be transferred out on its own in most cases. When you transfer out LGPS benefits however, the AVC fund must be transferred with it.
If you apply to transfer your AVC with our Fund, we’ll offer to book you an online, phone or face-to-face appointment with Pension Wise.
Pension Wise is a government service from MoneyHelper. They offer free, impartial pensions guidance about Defined Contribution pension options to help you make informed decisions.
Your transfer application can only go ahead following a Pension Wise appointment or if you choose to opt out of receiving guidance.
Pension scams
When you’ve earned your pension the last thing you want to do is lose it. Pension scams (or pension liberation fraud) put your pension at risk, so it’s important to identify a pension scam.
Pension scams are changing all the time, but some examples of the types of things to be wary of are:
- cold calls, texts, emails or letters from organisations that you haven’t contacted directly
- claims to help you access your pension before the age of 55
- claims that you’ll be able to get all of your pension in one big lump sum
- any pension related “opportunity” which offers cash back, overseas investment, loopholes or new investment techniques
- offers which include a free pension review
- offers which advise you to act quickly on a time limited opportunity
The Pension Regulator provides guidance on protecting yourself against pension scams.
The national LGPS member’s website also includes some information about pension scams and guidance on how to find an independent financial advisor.