Block on transfers from unfunded public sector pension schemes to flexible pension arrangements

From 6 April 2015, changes under the Pensions Schemes Act 2015 will stop transfers from unfunded public service pension schemes, such as the Teachers’ Pension Scheme, to pension schemes, whether in the UK or abroad, based on defined contributions or flexible access arrangements.

If you do wish to seek a transfer to such a scheme before 6 April 2015 you need to have made a request for and received a Guaranteed Transfer Value (GTV) from the Teachers’ Pension Scheme and submitted a properly completed Discharge Form 350 to Teachers’ Pensions before 6 April 2015. An original signature is required and we do not accept email or fax copies. Please note that the Teachers’ Pensions offices will be closed from 3 April to 6 April inclusive for Easter.

Please be aware that there is a significant amount of work involved in providing a GTV and we are currently experiencing a high volume of new applications. Whilst we are making every effort to process these applications before 5 April, where the information is not already on our records we have to:

• request details of your Guaranteed Minimum Pension (GMP) record from HMRC
• confirm service and salary details with your former employer(s) if there are gaps in your service record
• verify your date of birth (if not already verified)

All of these steps are reliant on third party information and as such will lead to delays in processing your GTV application. We will be writing to all members whose application is at this information gathering stage to advise them that we cannot process their application until we receive the requested data.

Please note the changes will not stop members living abroad from accessing their UK public service pension and it will still be possible to transfer from an unfunded public service pension scheme after 5 April 2015 but in practice it must be to a Defined Benefit scheme.

There are significant benefits from remaining in your public service pension scheme, in which the benefits are underpinned by the State, including:

• Index-linked uprating
• Generous survivors and dependants benefits
• Death and ill-health retirement provisions.

New Transfer Club arrangements.

With effect from 1 April 2015 new guidance and factors have been issued by the Cabinet Office governing transfers between schemes operating within the "Transfer Club".　 This is an agreed basis between various public and private sector pension schemes.　 The guidance also incorporates instructions on how transfers will be treated in respect of those members with benefits from the newly introduced Career Average schemes.　 This guidance can be found on the link below:

http://www.civilservicepensionscheme.org.uk/media/95083/club-memorandum-march-2015.pdf (This link opens in a new window)

In particular, please note:

• The member’s "election to proceed" for a Club transfer (Form 350 in the TPS) must be received within 12 months of joining the TPS or the relevant Club scheme, and
• It will not be possible to undertake a Club transfer if there is a gap between the sending scheme and the receiving scheme of more than 5 years.

Club transfers and the Annual Allowance

Section 8 of the Club guidance above sets out that in cases where a member has had a salary increase on transfer to another Club scheme, the difference arising from the salary increase will be taken into account for the purposes of the Annual Allowance. Similarly, in cases where a person who has benefited from enhanced Career Average indexation following a Club Transfer, the amount of this benefit will also affect a member’s Annual Allowance. Worked examples setting out the effect of a Club Transfer on a person’s ‘pension input amount’ are shown in the link below:

http://www.civilservicepensionscheme.org.uk/media/95084/transfer-club-and-annual-allowance.pdf (This link opens in a new window)

Transfers involving the statutory teaching schemes in Scotland, Northern Ireland and England & Wales known as ‘Comparable United Kingdom Schemes’ (CUKS)

Existing arrangements for members transferring between CUKS arrangements will no longer apply after 31 March 2015 unless the individual joined the CUKS on or before 31 March 2015 and applies for the transfer on or before 31 March 2017. This is in line with the Government’s response to the consultation further regulations to complete the reform of the Teachers’ Pension Scheme as set out on pages 13 and 14 (Question 5) of the link to the document below:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file
/360734/Consultation_response_to__Further_regulations_to_complete_reform_.pdf (This link opens in a new window)

New entrants to the TPS on or after 1 April 2015 from another CUKS arrangement will be treated as a Club Transfer, subject to the new Club Transfer timescales being met, referred to above.

Transfers in respect of statutory teaching schemes in the Channel Islands and the Isle of Man

Since 1 January 2007, transfers in respect of the Channel Islands and the Isle of Man have been dealt with on Club terms but with no limit on the timescale to complete the transfer.　

With effect from 1 April 2015, members who join the Teachers’ Pension Scheme on or before 31 March 2015 from the Channel Islands and the Isle of Man will have until 31 March 2017 to apply for a transfer. If an individual joins the Teachers’ Pension Scheme on or after 1 April 2015, the new Club timescales referred to above will apply.