Your former pension rights could add value to your Police Pension Scheme
On this page:
- Who can apply for a pension transfer
- Step-by-step guide to transferring a pension in
- Types of transfers
- Information for Practitioner members
When you join the Scottish Police Pension Scheme, it’s worth your while to consider transferring your existing pension savings to your new scheme. We can accept transfers from most pension schemes as long as they are registered pension schemes with HM Revenue & Customs (HMRC) including Recognised Overseas Pension Schemes.
This is an important benefit for new members (and for re-joiners) as your existing pension rights can boost your final pension from the Police scheme.
What is a transfer value?
A transfer value (which may sometimes be referred to as a Cash Equivalent Transfer Value) is the monetary value placed on your pension benefits by your previous scheme. Essentially, it’s a cash settlement in exchange for giving up your rights under the former scheme that is then used to buy rights in another pension scheme. We use this transfer amount to work out how much additional pension rights can be provided in your new scheme using guidelines supplied by the Government Actuary’s Department. Once a transfer value has been paid you’ll have no further claim to pension rights from your former scheme or plan.
Who can apply for a pension transfer?
Transfer payments can only be accepted from active scheme members – including new and re-joining members, In some circumstances, members of the PPS 1987 and NPPS 2006 schemes can also transfer their former pensions to increase their benefits. See below for further information or contact the Transfers Team.
If you opt out of your scheme before a transfer payment is received the transfer will be cancelled. In cases like this, subsequent requests to transfer are treated as new applications and are subject to the 12 months’ timescales from your first date of eligible membership.
If you leave your new scheme with less than 2 years’ service, you may be entitled to a refund but you should note that any transferred in credit from a pension scheme outside the public sector can’t be refunded. Therefore if you transfer in from one of these types of schemes you will not be entitled to a refund even if you leave with less than 2 years’ service.
Transferring in: a step-by-step guide
Complete a joiner questionnaire
To start the transfer process, complete and return a joiner questionnaire. You should do this as quickly as possible after joining the scheme as transfers can take many months to process and should ideally be completed within the first 12 months of membership. Initially, it’s only an enquiry which we’ll acknowledge and confirm whether or not you’re eligible to transfer.
Obtain your transfer value
The basic requirement of a transfer is to obtain a transfer value of your former pension rights. In some instances, we’ll be able to contact your former pension provider to obtain your transfer value. Some pension schemes don’t provide transfer information to third parties and in these cases, we’ll provide you with a transfer pack so you can obtain the required information directly from your former pension provider. Follow the guidance closely and forward all the information you receive from them to SPPA as soon as possible.
If you’re transferring from a Police scheme elsewhere in the UK, it’s relatively straightforward – particularly if you have continuous service. If that’s the case, we’ll request a certificate of your membership from your former scheme and these details will be applied to your new pension record. You’ll be informed when this is complete.
If you’re transferring from another public sector scheme, you may be able to benefit from ‘club’ arrangements which offer favourable valuations.
Once we’ve established type of pension savings you have (and their value), we’ll provide an estimated illustration of the extra pension or service your transfer will buy in the Police scheme. You should consider taking independent financial advice at this stage.
Decide if you want the transfer to go ahead
Once you’ve weighed up the benefits, you should decide if you want the transfer to go ahead and confirm your request by completing the option forms we’ve provided (and any other forms required by your former scheme). We need these for the transfer to be completed. Again, it’s important to move quickly as, in most cases, transfers must be completed with 12 months of joining the scheme. If you don’t go ahead and subsequently make another request, it may fall outside your initial 12 months’ membership and be disallowed.
When we receive your transfer election, we’ll ask your existing provider for a payment of the transfer value. After we’ve received the transfer payment we’ll update your pension record and confirm the completion.
You should note that the actual membership credit you receive will depend on the actual transfer payment received from your previous scheme. In some cases, this may differ from your estimate – for example, it could be less if the timescales are delayed
What type of transfer are you making?
There are three broad types of transfer that can be made into the Police scheme. Choose the options that best describe the type of transfer you’ll be making. Bear in mind that you may have pension rights that match more than one description!
Re-joiners and transfers from Police schemes outside Scotland
If you have pension rights from a Police force elsewhere in the UK, you can apply to transfer as soon as you join the Scottish Police scheme. This type of transfer should be completed within 12 months of joining.
Transfers between UK schemes are not automatic. Make your initial request by filling in the Joiner Questionnaire and returning it to us.
Your former scheme will provide us with a transfer certificate and we’ll transfer the details from your former scheme onto your current scheme record. Once this is completed we’ll send you a copy of the certificate. This usually means you’ll have continuity of service and that you have the same pension arrangements you had in your former scheme as long as there was no substantial break of service.
You should forward a copy of our confirmation of transfer letter and the certificate from your former scheme to your HR representative and they’ll update your SCoPe record.
Transfers from UK Public Sector Pension Schemes
If you’re transferring benefits from other UK public sector pension schemes to your new Police scheme, it will usually be calculated using preferential terms under the Public Sector Transfer Club.
If you want to transfer previous public sector pension rights, complete the relevant section on your Joiner Questionnaire.
Club transfer timescales
Club terms can only be applied if the gap between you leaving your previous scheme and joining the Police scheme is less than five years.
Your signed election to proceed with the transfer must be received by the former scheme within 12 months of joining the new scheme for Club transfer arrangements to apply.
To make sure you optimise your benefits, start the transfer request process as quickly as possible and confirm your intention to proceed as soon as you’re happy with the terms offered to you.
If you have a gap of 5 years or more between schemes then you may still be able to transfer on less beneficial terms non club terms as long as your request is made within 12 months of joining.
Allowable pension types
If your former scheme had an element of a final salary pension and an element of career average revalued earnings (CARE) pension it’s treated as if you’re transferring two separate pension elements. The CARE element is transferred into the reciprocal CARE scheme and the final salary element is transferred to our last open final salary scheme. Transfers of this type don’t always provide you with the same normal pension age or benefit structure you had in your former scheme.
In some cases, transfers between schemes in the Public Sector Transfer Club can result in members exceeding the pension Annual Allowance threshold. This can lead to a tax charge.
Transfers from schemes outside the public sector
The Police scheme can also accept transfers from private personal pensions and pension schemes provided by private sector employers – including those with final salary type defined benefits.
Most private sector pensions tend to be ‘money purchase schemes’ which are invested in a variety of different sources – like stocks and shares, property or cash. With this type of investment, valuations fluctuate frequently and are calculated on a daily basis based on the fund’s value at the date of calculation.
Some occupational pension schemes will guarantee their transfer values for three months. If this is the case it’s important to deal with the transfer and its associated paperwork as quickly as possible. Delays in processing can lead to the expiry of guarantee dates and that can mean you may have to pay for additional transfer valuations from your former scheme.
Pension credit estimates
Once we have a transfer valuation for you, we’ll estimate the amount of pension credit your transfer value will provide in the Police scheme. This will be expressed as an additional yearly pension on retirement – not as a total ‘pot’ value like it would be shown on your current pension statements. This additional pension amount will also be index-linked to protect you against future inflation.
Additional voluntary contributions (AVCs) and free-standing additional voluntary contributions (FSAVCs)
SPPA doesn’t accept the transfer of AVCs or FSAVCs into the Police scheme. The exception to this is PPS 1987 members, however the AVC or FSAVC funds cannot contain contributions made after the member’s first day of eligible service in the Police scheme.
Pension credits that have been acquired as part of a divorce or civil partnership dissolution settlement cannot be transferred into any of the Scottish Police schemes.
Members of the PPS 1987 and NPPS 2006
To investigate the possibility of transferring previous benefits into either the PPS 1987 or the NPPS 2006 scheme, please email us for further information.
You should note that if you’re now a member of the 2015 CARE scheme due to the ending of a period of protection, you’ll not be able to transfer.
If you’re a protected (or tapered protected) member of the Police Pension Scheme 1987 or 2006 there is no time limit on transferring in your previous pension benefits unless you’re now a transitioned member of the 2015 CARE Scheme. However the transfer would need to be completed before your intended retirement age and you should note that such transfers can take up to 6 months or more to complete.
Annual Allowance and Club Transfers
If you complete a transfer of pension rights using the Public Sector Transfer Club, any growth in pension benefits arising from a pensionable pay increase when you move between Club schemes must be taken into account when calculating the pension input amount for Annual Allowance purposes.
In final salary schemes this means that if there is a significant difference in the pensionable pay your transferred benefits in the previous scheme, and the current pensionable pay then there could be significant pension input.
This brings transferring members in line with members who receive an increase in pensionable pay without changing schemes.
Career average pension schemes also need to ensure that any enhanced revaluation applied to cover a break in employment is included in the calculation of the pension input amount.
Any adjustment to pension benefits to reflect differences in Club schemes is excluded.
Contacting SPPA Transfers Team
If you’re unable to download the joiner questionnaire, you can contact us on our Contact Us page.