Transferring out of the LGPS

Guidance on transferring out of the Local Government Pension Scheme.

Transfer value for deferred scheme member

The Local Government Pension Scheme is a Defined Benefit (DB) pension scheme.

The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have stated that they "believe that it will be in most people's best interests to keep their defined benefit pension. If you transfer out of a defined benefit pension, you cannot reverse it. Make sure that you understand the risks to help you make an informed decision".

However, you may wish to transfer your pension to another DB scheme or a "Club" scheme (mainly public sector schemes such as Civil Service, Teachers' Pensions, NHS Pensions).

There may be some circumstances in which you wish to transfer your pension to a Defined Contribution (DC) pension scheme (where your money is invested in the financial markets).

You cannot transfer out of the Local Government Pension Scheme if you are currently contributing to or are in receipt of an annual pension from the Local Government Pension Scheme in England or Wales (excluding a dependant's pension or a pension credit from divorce).

What to do
  1. Check that you are at least a year from normal pension age (NPA). The Local Government Pension Scheme regulations and the Pensions Schemes Act 1993 state that a member is entitled to a Cash Equivalent Transfer Value (CETV) for the purposes of transferring benefits provided that the Scheme member elects to transfer at least one year before their NPA. Contact the Berkshire Pension Team if you are unsure of your NPA.
  2. Read the information on Pension Scams and Liberation, especially if you wish to transfer to a DC pension scheme (i.e., a personal pension or an overseas scheme).
  3. Be very cautious - criminals are targeting pension transfers.
  4. Identify your new pension scheme and carry out your own internet research into this scheme. Check if there are any problems reported with the scheme. (Research is not necessary if you are transferring to a "Club" scheme as describe above.)
  5. Contact your new pension provider to find out:
  • if they can accept a transfer from a defined benefit pension scheme (the Local Government Pension Scheme is a defined benefit pension scheme)
  • their procedure for transferring

You will probably be asked for a CETV

What to expect

We will provide transfer information (where applicable) within 15 working days of receiving a request. This will include:

  • CETV
  • a statement of your current pension benefits, several forms (known as 'discharge forms') which need to be completed by you and your new pension scheme administrator
  • in some cases, your financial adviser and then returned to the Berkshire Pension Team

If you wish to transfer to a DC pension scheme and the total transfer value of all your pension benefits in the Local Government Pension Scheme in England and Wales is more than £30,000, then you will be legally required to obtain financial advice from an adviser approved by the FCA. The approved adviser will charge for this advice, and you will need to pay the adviser directly from your own funds.

You can only request one CETV per pension account in a 12-month period which is guaranteed for three months or until 12 months before your Normal Pension Age if sooner.   

If you decide to proceed with a transfer then we will make payment within 15 working days of receiving all the fully completed discharge forms. However, in some cases we may need to contact you for further information about your transfer and your reasons for transferring. This may delay your transfer.

Please note that one of two conditions must be met before a statutory transfer can take place

Transfer video

Please watch a short video explaining what you should consider before agreeing to a transfer.

Overseas transfers only

Warning: if you transfer your pension to an overseas pension scheme, then it will no longer be protected by UK law.

The overseas pension scheme must appear on the list of Recognised Overseas Pension Schemes (ROPS) issued by HM Revenue and Customs (HMRC), see HMRC ROPS.

Some overseas transfers will be subject to a 25% tax charge, see HMRC overseas transfer tax charge.