Transferring benefits out of the LGPS
Most members of the Local Government Pension Scheme (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).
You must ask for a transfer at least 12 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.
You may wish to read the pensions liberation page to find out more about the tax consequences of taking your benefits before age 55.
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.