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Transfers

LGPS transfer rate

The calculation of all transfers into and out of the Local Government Pension Scheme (LGPS) was suspended as a result of the change to the discount rate from 16 March 2016, as announced in the recent Budget. The Government sets the discount rate for all public service pension schemes.

The discount rate affects the amount of money that would be payable from the LGPS if you were to transfer your pension benefits to another pension scheme and also the pension benefits that would be purchased in the LGPS as a result of transferring previous pension rights into the scheme. The discount rate also affects the amount of your Cash Equivalent Value (CEV) if you have requested this for divorce purposes.

We have now received updated factors from the Government’s actuaries which take into account the change to the discount rate when calculating transfers to and from the LGPS. We are now waiting for our systems to be updated by our software provider.

In the meantime, manual calculations will be carried out for urgent cases and cases approaching statutory deadlines. However, these can be very time consuming, so please bear with us and only contact us to chase cases that are genuinely urgent.

Note for Financial Advisors

Please do not contact us to chase cases on a weekly basis. The resources required to deal with these calls can be used to process cases.

Please also note that pressure to carry out a transfer as quickly as possible is one of the warning signs of a pension scam, that the Pensions Regulator advises administrators to watch out for. So, continually chasing us to provide details for a particular case could raise concerns, resulting in further checks having to be made before a transfer can be paid.

Can I transfer pension rights from other schemes into the LGPS?

A transfer can be accepted from another registered pension scheme (approved by HM Revenue & Customs) or a European pensions institution. But a transfer can not be accepted in respect of pension credit rights awarded as part of a Pension Sharing Order.

Don’t delay – you could lose out!

A transfer usually buys more if it is fully completed within a year of you joining the LGPS. And if you decide not to look into a transfer now, your employer or your former pension scheme might not allow it at all later on.

The LGPS is a club scheme

Club schemes (mainly public sector schemes) have a special arrangement that means the transfer credit your transfer buys closely matches the benefits you built up in your former scheme. But a transfer can only be dealt with on a ‘club basis’ if you elect to go ahead within a year of joining the LGPS. If you don’t, a transfer can only proceed on a ‘non club basis’ and will probably buy a greatly reduced transfer credit.

Think carefully

Don’t make your mind up about transferring now. The best time to make your decision is when we tell you how much pension the transfer would buy for you.

What do I need to do?

The six steps to a transfer

  1. You ask for a transfer quote (use this form, fill in part A and send it to your previous pension provider)
  2. You send the quote to us
  3. We send you a quote of what the transfer would buy for you in the LGPS
  4. You let us know if you want to go ahead
  5. Your previous pension scheme pays the transfer value to us
  6. We update your pension scheme record and tell you what the transfer has bought for you in the LGPS

Read this for more information.