Outward transfer of your PPS pension rights
If you leave or opt out of PPS before pension age, you have a choice of options for your benefits. Your choice will generally depend on whether you are in the first three months of your police service and, if not, whether you have two or more years’ qualifying service.
If your police service plus any linked qualifying service (i.e. qualifying service brought across from another pension scheme through a transfer value) amounts to less than three months, then your contributions will be refunded.
If your police service plus any linked qualifying service amounts to three months or more, but your total qualifying service is less than two years, your choice is:
- A transfer out of your PPS pension rights to another occupational pension scheme, or
- A refund of your contributions.
If you have two or more years’ qualifying service (or if you transferred pension rights into the PPS from a personal pension scheme) your choice is:
- A transfer out of your PPS pension rights to another occupational pension scheme, or
- Retaining deferred benefits within PPS.
You may transfer your PPS rights to:
- Another public sector pension scheme, or
- Any other occupational pension scheme which is registered with HM Revenue and Customs (which can include a personal pension plan), or
- A qualifying recognised overseas pension scheme.
If you are opting out of PPS while staying in the police, only the second option is open to you.
The transfer payment will be in the form of a transfer value.
Example
George leaves the police service at age 50 to move to the private sector. He has 15 years’ pensionable service in PPS and is informed by his new employer that he will be able to transfer this to his new employer’s pension scheme. He knows that if he takes no action, he will be entitled to a police pension of 15/60 of his final salary, and an associated lump sum, when he is 60, which will be increased for inflation from the time at which he leaves the police service to his 60th birthday. The police authority, on request, will calculate the cash equivalent transfer value of his police pension rights and provide this information to his new employer. His new employer will be able to tell him what pension benefits this will buy in their pension scheme.
George is then free to choose whether or not to transfer his police pension rights. This will be his own decision and the police authority cannot advise him as to what he should do. To transfer his police pension rights, he must give written notice to the police authority.
There are a number of issues to consider before making a transfer:
- You must apply for a transfer payment within six months of leaving the police service or opting out of PPS (this is extended to twelve months for transfers to a public sector scheme) – these time limits may be extended by the police authority at their discretion
- You are not entitled to a deferred pension from PPS if you received a refund of contributions – a transfer will be possible only if you repay the refund first
- You will not be able to have a transfer if you are within a year of reaching the age of 60
- The transfer value may not necessarily buy the same length of service in the new scheme – an estimate from the new scheme should provide an indication
- The range and type of benefits offered by another scheme may be quite different from those offered by PPS.
LPPA can provide an example of a transfer value calculation and more information about how PPS arrangements work, but cannot give specific advice on individual cases.