Your former pension rights could add value to your Scottish Teachers' Pension
On this page:
- Who can apply for a pension transfer
- Step-by-step guide to transferring a pension in
- Types of transfers
Who can apply for a pension transfer?
Transfer payments can only be accepted from active scheme members. 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 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.
What is a transfer value?
A transfer value (or Cash Equivalent Transfer Value) is the cash valuation of your pension benefits by your previous scheme. It’s the amount of money they’d provide in exchange for you giving up your rights in your former scheme. We use this transfer amount to work out how much additional pension rights can be provided in your new scheme, following 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.
12 month transfer deadline
It’s important to make your transfer request as quickly as possible. Transfers must be completed within 12 months of the Scottish Teachers' Pension Scheme and before your normal pension age. SPPA won’t accept responsibility for delays incurred by you or your previous pension provider.
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 transferring these pension rights can increase your final pension pot.
Transferring in: a step-by-step guide
Complete a joiner questionnaire
To start the process, you should complete and return a joiner questionnaire. Transfer requests should be made within 12 months of you joining or re-joining the scheme. So, It’s important to do this as soon as possible if you'd like to transfer in. We’ll acknowledge your initial enquiry and confirm whether you are eligible to transfer.
Obtain your transfer value
To transfer your benefits, we need to obtain the value of your former pension rights. In some instances, we can obtain a transfer value from your former pension provider.
Some pension providers do not provide transfer information to third parties. In cases like this, we'll provide you with a transfer pack so you can obtain the required information from your former provider. Follow the guidance closely and forward all the information you receive from them to SPPA as quickly as possible.
Compare benefits
Once we have a cash valuation, we’ll share an estimate of how much extra pension or service the transfer will buy in the Scottish Teachers’ scheme. You should consider taking independent financial advice at this stage.
Decide if you want the transfer to go ahead
If you wish to proceed with the transfer, you can confirm your request by completing the option forms provided by us. There may also be additional forms requested by your former provider. These forms should be returned as soon as possible, as transfers must be completed within 12 months of joining the scheme.
If you choose not to proceed with the transfer, you may not be able to make another request if the 12 months period has passed.
Await confirmation
When we receive your election for the transfer to go ahead, we’ll request payment from your former provider. When we receive the transfer payment, your pension record will be updated and we’ll confirm the transfer is complete.
Your membership credit will depend on the actual transfer payment received from your previous provider. In some cases, this may differ from estimates provided.
What type of transfer are you making?
Three broad types of transfer can be made into the Scottish Teachers’ Pension Scheme 2015. Take a look at the options below for more information on the type of transfer you’ll be making – bearing in mind you may have pension savings that match more than one description!
Re-joiners and transfers from Teaching schemes outside Scotland
If you’ve re-joined the Scottish Teachers' scheme after a break of five years or more, you can choose to transfer any previously preserved Teachers service into the Scottish Teachers' 2015 CARE Scheme. Applications should be made in writing immediately after joining.
If you have Teachers pension rights built up in England & Wales or Northern Ireland, you should apply for a transfer as soon as you join the Scottish Teachers' scheme.
Transfers between UK schemes are not automatic, so you must complete the Joiner Questionnaire and return it to us.
Transfers from UK Public Sector Pension Schemes
If you’re transferring benefits from other UK public sector pension schemes to the Scottish Teachers' scheme, you should be able to benefit from preferential terms under the Public Sector Transfer Club. You may also qualify to retain a lower normal pension age.
If the conditions for the Club transfer are not met you may still be able to transfer on less beneficial non-Club terms – although you still need to make your transfer request within 12 months of joining the scheme. To make sure you benefit from the enhanced Club terms you should apply for your transfer as soon as possible after joining the scheme.
If your pension from your former scheme has an element of final salary pension and also a career average revalued earnings (CARE) pension, you’ll be transferring two separate pension elements. The CARE element will be transferred into the reciprocal CARE scheme and the final salary element will go into our last open final salary scheme. This may not provide you with the same retirement age or benefit structure you had in your former scheme.
If you want to transfer previous public sector pension rights, complete the relevant section on your Joiner Questionnaire.
Annual allowance
Some transfers between schemes in the Public Sector Transfer Club may result in members exceeding the pension Annual Allowance threshold. This can attract a tax charge. To check that your transfer won’t exceed the Annual Allowance rules, see the details here.
Transfers from schemes outside the public sector
Your new scheme can also accept transfers from private personal pensions and pension schemes provided by private sector employers – including defined benefit final salary schemes.
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.
If you want to transfer previous public sector pension rights, complete the relevant section on your Joiner Questionnaire.
Pension credit estimates
Once we receive your transfer valuation, we’ll supply an estimate of the amount of pension credit your transfer value will provide in the Scottish Teachers’ Pension Scheme 2015. This will be shown as an additional yearly pension on retirement. Your current pension statements probably show the total value of your fund – so, note, that this is different. You should compare our estimate to the amount of annual pension that your fund could buy on retirement. The additional pension amount shown on your estimate will also be index-linked to protect you against future inflation.
Additional voluntary contributions (AVCs) and free-standing additional voluntary contributions (FSAVCs)
AVCs and FSAVCs cannot be transferred into the Scottish Teachers' scheme.
NOTE: Pension credits acquired as part of a divorce or civil partnership dissolution settlement cannot be transferred into your Scottish Teachers' pension scheme.
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.