Thinking of requesting a transfer?
We know that some of our scheme members might be thinking about transferring their pension benefits due to the current financial uncertainty around investments. If this applies to you, or you’re thinking about accessing your pension by retiring early when you wouldn’t otherwise have done so, please read this post carefully.
Firstly, we’d like to remind you that the LGPS is a defined benefit pension scheme. This means your pension is based on your salary and how long you've paid in. It’s not linked to stock market performance, so both your contributions and your pension, whether in payment or not, won’t be affected.
It’s important you know about the risks of transferring your pension to another scheme at such a critical time. Transferring your pension, or accessing benefits, are actions that can’t be undone and will have a lasting effect on your retirement. We’re here to support you with making informed decisions.
Before transferring your benefits, you should:
- Ask your financial adviser to look at any increased risks linked with transfers.
- Get free and impartial pensions guidance offered by Pension Wise.
Transfers between defined benefit (DB) and defined contribution (DC) transfers
Guidance has recently been issued by The Pension Regulator (TPR), the Financial Conduct Authority (FCA), and the Pensions Advisory Service for anyone considering a transfer from a DB to a DC pension scheme. You can read the letter following the link under Related Documents. It explains what you should think about before deciding to transfer any DB pension, and where to go for impartial guidance. If your transfer value is more than £30,000, you must, by law, take independent financial advice from someone who is authorised by the Financial Conduct Authority (FCA).
Please remember this letter has been issued as a general warning to all DB pension scheme members. Although the LGPS is a DB scheme, it is a statutory scheme backed by the Government and therefore the benefits paid are secure and set out in law. The references to the Pension Protection Fund (PPF) do not apply as the LGPS does not need it as it is already protected.