Transferring your LGPS benefits to another pension scheme
What will happen if I wish to transfer my LGPS benefits to another pension scheme?
If you are joining another pension arrangement, you may wish to consider transferring your LGPS benefits to it. This may even be to an overseas pension scheme or arrangement that meets HM Revenue and Customs conditions. You cannot transfer your benefits (other than AVCs) if you leave less than one year before your Normal Pension Age.
An option to transfer (other than in respect of AVCs) must be made at least 12 months before your Normal Pension Age or, if later, within 6 months of leaving. If you transfer your LGPS benefits and you have paid Additional Voluntary Contributions (AVCs) arranged through the LGPS (in-house AVCs), you must also transfer your AVC fund.
You can only transfer benefits from the LGPS if you have not already drawn benefits from the LGPS (either in your current employment or any earlier employment). Also, if you hold more than one deferred benefit in the LGPS in England and Wales (either in the same or separate LGPS pension funds), you will be required to transfer all or none of the benefits you hold. It is not possible to transfer one deferred benefit whilst retaining another deferred benefit in the LGPS.
Is 'Freedom and Choice' available from the LGPS at age 55?
Reforms offering greater flexibility, 'Freedom and Choice', in the way that individuals aged 55 and over can access their defined contribution (DC) pensions became effective on 6 April 2015.
As the Local Government Pension Scheme (LGPS) is a public sector defined benefit (DB) scheme, 'freedom and choice' does not apply to it.
However, members do have the right to transfer their pension rights out of the LGPS to a DC arrangement offering 'flexible benefits'.
Any decision to transfer your benefits out of the LGPS requires careful consideration and should only occur after taking independent financial advice. Transferring to a DC Scheme offering ‘flexible benefits’ could lead to you losing guaranteed, valuable, index-linked pension benefits which in the case of your annual pension is payable for life.
Pension Liberation Fraud
To liberate your pension sounds to many people like a good thing but, in the pensions world, pension liberation is normally linked to fraud and accessing your pension benefits before the age 55.