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 (other than AVCs) 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.
If you are thinking of transferring your pension benefits out of the LGPS you should be aware that scammers operate in these markets and are after your pension. Use the find out more buttons on the right hand side of this page to find out how to protect yourself against scammers.
If you enter further pensionable employment, which has an approved pension scheme, a transfer payment may be made to that scheme in lieu of the deferred benefits.
Transfers are also available to Personal Pensions and Buy-Out-Bonds. Details of any transfer payment will be given to your new scheme on request.
N.B. Deferred benefits are extremely valuable and you should consider all the facts before making any decision to transfer. You may wish to seek the advice of an Independent Financial Adviser.
Flexible benefits were introduced by the Government from 6 April 2015 to allow members of defined contribution schemes, who are over age 55, more freedom on how they take money from their pension pot.
The LGPS is not a defined contribution pension scheme (it is a defined benefit scheme) and as such, it is not directly affected by these changes. However, if you stop paying into the LGPS and you have three or more months' membership, then unless you are retiring with immediate effect due to redundancy, business efficiency or ill health, you will have the right to transfer your LGPS pension to a defined contribution scheme providing flexible 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.
There are four main options for members who are in a defined contribution scheme which provides flexible benefits, including:
to purchase an annuity (yearly pension) or scheme pension, if offered
taking a number of cash sums at different stages
taking the entire pot as cash in one go
If you wish to transfer benefits out of the LGPS, you must contact your new pension provider to request a transfer value quotation from the Fund. Under the Pensions Act 1995, a quotation must be guaranteed for 3 months from the date of calculation.
Before transferring your LGPS benefits to a Defined Contribution arrangement, you MUST have obtained advice from an Independent Financial Advisor (IFA) authorised by the Financial Conduct Authority (FCA).