Transferring benefits out of the LGPS
Most members of the LGPS can transfer their benefits to another pension scheme. The new pension scheme must be registered with HMRC or be a recognised oversees pension scheme (ROPS). Please note that Nest can't accept transfers from a defined benefit scheme such as LGPS.
You must ask for a transfer at least twelve months before your normal pension age.
To transfer your benefits out, you’ll need to get a cash equivalent transfer value (CETV) from us. The CETV sets out the value of your pension and how much it could buy you in another pension scheme. The CETV is only valid for three months before a new one is needed.
Once your transfer is made, you’re no longer protected by the benefits of the LGPS. You’ll bear the risks of the investment and your future pension benefits.
If you're thinking about transferring your benefits out of the LGPS and seeking financial advice, we recommend you visit the Financial Conduct Authority's website. They've created a video explaining defined benefit pension scheme transfers, and the service you should expect from your financial adviser.
Covid-19 update: If you're thinking about transferring your pension during this time, please be sure to read the guidance letter produced by The Pension Regulator. The letter can be found under Related Documents and was last updated in June 2020.
Freedom and choice
Freedom and choice legislation has changed the way people over age 55 can access their defined contribution pension benefits.
The LGPS is a defined benefit scheme, so you can’t access these flexibilities whilst your benefits are in the LGPS.
If you transfer your benefits to a defined contribution scheme, and decide to access your pension benefits, they may be subject to a money purchase annual allowance (MPAA) arrangement.
The MPAA for the tax year 2018/2019 is £4,000. So, if MPAA applies to you, you’ll have to pay a tax charge on contributions made to money purchase pensions which exceed this limit in any tax year.
For more information, please read the freedom and choice Q&A factsheet.