This may even be to an overseas pension scheme or arrangement that meets HM Revenue and Customs conditions. You can only transfer your benefits if you leave more than one year before your Normal Pension Age and have elected for a transfer to proceed at least one year before your Normal Pension Age.
If you have paid Additional Voluntary Contributions (AVCs) arranged through the Scheme (in-house AVCs), you have the following options:
- Transfer out your AVC fund with your main Scheme benefits.
- Transfer out your AVC fund and keep your main Scheme benefits with NILGOSC.
- Transfer out your Scheme benefits and keep your AVC fund with the in-house AVC provider.
Your new pension provider will require a transfer value quotation which, under the Pensions Act 1993, NILGOSC will guarantee for a period of three months from the date of calculation (known as the ‘Guarantee Date’). Your new pension provider can then advise you of the additional benefits the transfer will buy in their scheme. A written option to proceed with the guaranteed transfer value must be received within the three month guaranteed period. If you opt to proceed, the normal time limit for payment of the guaranteed transfer value will be six months from the ‘Guarantee Date’. If payment is not made within this period, NILGOSC will need to recalculate the value as at the actual date of payment and pay the recalculated value or, if it is greater, the original value plus interest.
Transfer values are calculated in accordance with the terms and conditions of the Local Government Pension Scheme Regulations (Northern Ireland) 2014 which comply with the requirements of the Pensions Schemes Act 1993, as amended.
The benefits that you have within the Scheme are known as safeguarded benefits. This means that from 6th April 2015 you are required to take appropriate independent advice before being allowed to transfer your benefits to a defined contribution scheme or personal pension. You must take this independent advice from an advisor who is authorised by the Financial Conduct Authority (FCA) to advise on transfers and NILGOSC must be provided with evidence of the advice.
If the transfer value of all your benefits in the Scheme is less than £30,000 you are not required to formally take advice.
Transfers to public sector schemes usually give benefits that are similar to those in the Scheme, under what are known as Club transfer rules. To qualify for a Club transfer, you must apply for the transfer within 12 months of joining your new pension scheme and must not have had a continuous break of more than five years in active membership of a public service pension scheme.
If you are considering whether to transfer benefits, make sure that you have the full information about the two pension arrangements, i.e. details of what your benefits are worth in the Scheme 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 Scheme benefits include cost of living increases.
Pension transfers can be complex, so in all cases you may wish to consult an independent financial adviser before making a decision. If you do transfer your deferred benefits to a personal pension plan, stakeholder pension scheme, buy-out insurance policy or to an employer’s money purchase scheme, you will be bearing all of the investment risk which could significantly affect your future pension benefits.
If a full transfer payment is made, you will not be entitled to any further benefits from the Scheme for yourself, your spouse, civil partner, eligible cohabiting partner or eligible children.
The Scheme may reduce transfer values to defined contribution schemes for a designated period if it is considered that the level or expected level of transfers out of the Scheme increases the likelihood of payments out of the public purse being needed to ensure that the Scheme can meet its liabilities.
Beware of the dangers of pensions liberation fraud
The Pensions Regulator has recently issued a warning against early release of pension offers. The statement was jointly issued by the Pensions Regulator (TPR), the Financial Services Authority (FSA) and HM Revenue and Customs (HMRC) and is a response to a noted increase in pension offers which claim to provide loans or tax-free cash from individual’s pensions savings before they attain age 55. For more information, visit the Be fraud aware page.