Transferring benefits out of the NHS pension scheme
- You are able to transfer your benefits out of the NHS pension scheme.
- There are restrictions on the type of transfers available and time limits which apply.
- Benefits can generally be transferred out of the scheme at any time before your normal pension age. Preserved benefits can only be transferred out to another Defined Benefit scheme or to an overseas scheme listed on the Qualifying Recognised Overseas Pension Scheme list maintained by HMRC. It is not possible to transfer these benefits out to a Defined Contribution scheme that permits flexible access.
- If your membership of the NHS pension scheme has been for less than 2 years you may be able to transfer out to a Defined Contribution scheme.
- If you wish to transfer out before your normal pension age and you have less than two years NHS pensionable service, you must join the receiving scheme within 12 months of leaving the NHS and initiate the transfer within 12 months of joining the new scheme.
Moving to a different UK nation
There are three separate NHS pension schemes; one for England and Wales, one for Scotland and one for Northern Ireland.
In order to ensure that your pension from your current NHS employment fully reflects all your NHS pensionable service you should consider transferring your service into your current NHS pension scheme.
You will need to actively apply to transfer your pension to your new pension scheme within 12 months of moving. Scotland will consider transfers outside of 12 months so long as it is before your Normal Pension Age.
Apply to transfer:
- If you are working in England and Wales
- If you are working in Scotland
- If you are working in Northern Ireland
If you are transferring from the 1995 section of the scheme in one nation to the 1995 section of the scheme in another nation you will be credited with day for day service. The same is true if you are transferring from the 2008 section of the scheme in one nation to the 2008 section of the scheme in another. This will only be possible if the transfer happens within 5 years of leaving the NHS.
If you are transferring from the 1995 section to the 2008 section the transfer will be calculated on a cash equivalent basis. The same is true if you are transferring from the 1995/2008 section to the 2015 CARE scheme after a break of 5 years or more.
Transfers of 2015 CARE scheme benefits between corresponding NHS pension schemes will provide like for like service and a cash equivalent transfer value based on the income accrued in the transferring NHS scheme. The pension earned in your previous scheme will be transferred to the receiving scheme and will be uprated and treated as though it had been earned in the current NHS scheme.
If you are buying added years and wish to continue with the contract when you move to another nation you must inform your employer and the new pension administrators of this arrangement immediately.
Transferring your NHS pension abroad
- The pensions agencies permit the transfer of benefits abroad if the scheme is recognised by HMRC as a qualifying recognised overseas pension schemeand if such a qualifying scheme accepts the transfer.
- Members contributing to the scheme in England and Wales should read the NHS BSA overseas transfer out guide and application pack.
If you are transferring to a registered occupational pension scheme and you have more than two calendar years NHS pensionable service, you can apply to transfer at any time before your normal pension age.
If you have less than two calendar years NHS pensionable service, you must join the receiving scheme and initiate a transfer within 12 months of leaving the NHS and before your normal pension age.
If you are transferring to a registered insurance company and you have more than two calendar years NHS pensionable service, you need to have left NHS pensionable service and applied for the transfer at least 12 months before your normal pension age.
If you have less than two calendar years NHS pensionable service the same age limits apply but you must also take out a personal pension or stakeholder plan and initiate the transfer within 12 months of leaving NHS employment.
How to apply for a transfer out
- Ask your new registered scheme to write to your previous pensions agency to initiate a transfer (advising them of the time limits), or write directly to them yourself. See below.
- If the transfer is possible, a CETV (cash equivalent transfer value) will be provided.
- The new scheme administrators will be able to advise on the level of benefits this will acquire in the new scheme. You will be invited to complete discharge forms to confirm that you wish to proceed once you have had a chance to compare the value of the benefits in the new scheme with those in the NHS pension scheme.
Apply to transfer:
Public Sector Transfer Club
Certain public sector schemes are members of what is known as the Public Sector Transfer Club (participating schemes are known as ‘club schemes’). There are strict time limits for ‘club’ transfers which must be applied for within 12 months of joining the new club scheme and the break between the transferring scheme and the new scheme must not exceed five years.
A special calculation is used in the club transfer process which is often more favourable than that used for non-club schemes. Transfers between club schemes generally provide broadly equivalent benefits in the new scheme, regardless of any increase in salary on moving.
However, the calculation allows for any differences in the structure of the schemes, eg, a different normal pension age, so the amount of pensionable service offered in the new scheme may differ from the pensionable service in the old scheme.
If you have missed the time limit
- If you are entitled to a deferred pension then you can request to transfer the pension at time up to when you reach the scheme normal pension age
- If you left the scheme without entitlement to a deferred pension, then you must join your new scheme within 12 months of leaving the NHS and then request a transfer within 12 months of joining your new scheme. The transfer must be completed before you reach the scheme normal pension age.
- A transfer may still be available using the non-club rules.
Transferring out to a Non-Club scheme
This covers a transfer from the NHS pensions scheme to a scheme which is not a comparable NHS scheme or a member of the Club. There is no guarantee of the level of benefit which will be credited to you in the new scheme on account of your membership of the NHS pension scheme.
The cash equivalent value of the benefits in your former scheme will be used to calculate an amount of pension in the receiving scheme based on actuarial factors and assumptions specific to this scheme. They may not be the same as those used to calculate the value of the benefits in the NHS. In the 2015 scheme you will receive an annual pension and a contingent amount for a dependant. These pension amounts are revalued annually in line with in service factors, during active membership, and in line with increases under the Pensions (Increase) Act if your benefits are deferred or in payment. The normal pension age for these benefits is your state pension age. Different benefits may apply in the new scheme and this will be reflected in the estimate provided by your new administrator.
If you are transferring into a personal pension or defined pension scheme remember that the amounts credited in the NHS pension are guaranteed and will increase annually in line with the relevant factors. In your new scheme you will be credited with a fund of money which is invested on your behalf. This type of transfer is now available only to those who leave the NHS scheme with no entitlement to a deferred pension.
You are not committed to the transfer until you sign the discharge forms normally required only after the administrator of your new scheme has given you a quotation to confirm how much pension you will receiving in this scheme and you have compared this to the deferred pension retained in the NHS pension scheme or to the refund available (less than two calendar years of membership only).
HMRC has set a limit on how much Defined Benefits can grow by and how much can be contributed to Defined Contribution schemes before tax relief is clawed back. This limit is known as the Annual Allowance and is currently £60,000 but can reduce for higher earners.
Transfers into the NHS pension scheme can impact on the calculation where you have had a significant pay increase.
NHS Pension Scheme Additional Voluntary Contribution (AVC) plan
- If you contribute to the NHSPS AVC, your NHSPS AVC plan is not tied to your main scheme benefits.
- This can be transferred to an existing free standing AVC or personal pension/stakeholder pension provided it has the relevant approval under the Finance Act 2004.
- If you have been paying into the NHS pension scheme for less than two years you will be obliged to take a refund of a lump sum equal to the realisable value of the investments you have made into the NHS AVC (less tax).
- Contact your AVC provider directly to discuss your options.
Refund of contributions
This is only possible if you have less than two calendar years of scheme membership.
However, a refund will not be possible if you have less than two calendar years of scheme membership and have transferred a personal pension into the scheme.
If you are likely to rejoin the NHS pension scheme within five years, thus avoiding a disqualifying break, you may wish to simply leave the service until it can be combined with further NHS service. Please take note of the transfer time limits which apply to ensure that you will not lose this right by delaying your decision.