Your former pension rights could add value to your NHS 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
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 joining the NHS (Scotland) 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 from the NHS.
Transferring in: a step-by-step guide
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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.
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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. In cases like this, 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 quickly as possible.
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Compare benefits
Once we have a cash valuation, we’ll provide an estimated illustration describing how much extra pension or service your transfer will buy in the NHS scheme. You may want to take independent financial advice at this stage.
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Decide if you want the transfer to go ahead
Once you’ve compared the benefits, if you want to proceed with the transfer, just confirm your request by completing the option forms we’ve provided (and any other forms required by your former scheme). Again, acting quickly is important as transfers must be completed with 12 months of joining the scheme. If you don’t go ahead with your initial request then subsequently make another request, it may not be allowed if it’s outside your initial 12 months’ membership.
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Await confirmation
When we receive your election for the transfer to go ahead, we’ll request payment from your former provider. After we’ve received the transfer payment, we’ll update your pension record and confirm the completion of the transfer.
You should note that your membership credit will depend on the actual transfer payment received from your previous scheme. 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 NHS (Scotland) scheme. 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 NHS schemes outside Scotland
If you’ve re-joined the NHS (Scotland) scheme after a break of five years or more, you can choose to transfer any previously preserved NHS service into the NHS 2015 CARE Scheme. Applications should be made in writing immediately after joining.
If you have NHS pension rights built up in England & Wales or Northern Ireland, you should apply for transfer as soon as you join the NHS (Scotland) scheme. Although NHS to NHS transfers can currently be made at any time up until your normal retirement age, you should note that this arrangement may not always be in place so it’s best to consider transferring as soon as possible when moving between the different UK NHS Schemes.
Transfers between UK schemes are not automatic, you must complete the Joiner Questionnaire and return it to us.
If you have continuous NHS service or a gap of less than five years, you’ll receive broadly the same benefits on transfer from your former NHS scheme. The former scheme will calculate the transfer value and send the transfer details and payment to SPPA at the same time.
We’ll check the calculation and input the transfer details on our pension system and then inform you that the transfer is complete. We can only input the service which we have been provided from the former scheme. If you believe there’s a discrepancy in the information transferred, you should contact your former scheme directly as we don’t have access to any record of your service outside of the transfer details they’ve provided.
If there is a gap of five years or more in your NHS service, your benefits will be calculated on a different basis and you’ll be provided with an estimate of what your transfer value will purchase in the new scheme. We’ll provide you with an estimate and options forms so that you can make a decision. You may wish to take independent financial advice at this stage.
Added years contracts are transferable as long as you don’t have a gap of 12 months or more between employments. You’ll need to transfer to allow any added years contracts to continue. You should note that NHS employers / payrolls will not be able to make any deductions until SPPA confirms that the transfer has been completed. You should be aware that this could result in arrears of these contributions.
You should note that these types of transfer can take up to 6 month to complete.
Transfers from UK Public Sector Pension Schemes
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 NHS (Scotland) scheme. 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 NHS (Scotland) scheme.
NOTE: Pension credits acquired as part of a divorce or civil partnership dissolution settlement cannot be transferred into your NHS (Scotland) pension scheme.
Pension transfer options for NHS practitioners
If you're eligible to join the Scottish NHS pension schemes as an NHS practitioner, then you'll also have the option to transfer pension benefits into the scheme once you become a member.
If you've been in membership as a practitioner and you're leaving for any reason, you'll also have options to either receive a refund of contributions or to transfer your benefits out to another approved pension scheme.
Transferring in
Although the regulations surrounding pension transfers can get a little complicated, as a rule, if you're a member of the scheme and you have former pension benefits held elsewhere then you should have options to transfer them in order to gain additional credit in your NHS scheme.
If you've had previous practitioner service in either NHS England and Wales or Northern Ireland and you wish to transfer your pension benefits into NHS Scotland, you should contact the Transfers Team at SPPA as soon as possible after joining the NHS Scotland scheme.
If you've previously been a practitioner with NHS Scotland and you've been working for and paying into another defined benefit superannuation scheme such as the Universities' Superannuation Scheme, then you can transfer these benefits into the NHS Scheme.
If you've worked in the private sector and contributed to a private pension fund, your transfer request must be received by SPPA within 12 months of you starting your NHS employment
For all transfers into the scheme, you'll need to be an active member of the scheme, while your transfer is being processed.
Detailed information about transferring into the scheme can be found on our website.
Transferring out
If you're leaving NHS Scotland employment or opting out of the scheme, you can also transfer your benefits out of NHS Scotland into another defined benefit scheme.
You'll have to contact the scheme you wish to transfer your benefits into and they'll make the transfer request to SPPA.
You can find further information on transferring out of the pension scheme and find out if you can apply for a refund of contributions on our website.
Note that if you leave the scheme for any reason, you don't have to transfer out. Your benefits can be preserved within the scheme and taken from the minimum retirement age of 55 with a reduction for early payment or in full at your normal retirement age within the 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.