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Am I able to transfer a pension into/out of NPPS?

Transferring Benefits into the NPPS

 

If you transfer from one U.K. police force to another within the U.K., any previous police service in the NPPS for which you have paid pension contributions will be transferred day for day. If you have previously received a refund of pension contributions this sum would have to be repaid before a transfer could take place.  However, it may in certain circumstances not be possible for you to repay a refund.

 

If you were in another pension scheme or you contributed to a personal pension, it may be possible to transfer your pension rights into the NPPS.  If you were awarded a deferred pension from a previous job, it may be possible for this to be cancelled in favour of a transfer of pension rights, and your previous employer should tell you the amount of your pension and whether it is subject to any increases.  If your previous employer was a member of the Public Sector Transfer Club (Club), the service credited in the NPPS may be more beneficial than would be the case with another employer.  You must apply to transfer any Club deferred benefits within 12 months of joining the NPPS to benefit from the preferential rates.  Please contact SPPA for further details.

 

If you apply for a transfer of pension rights, you will be informed of the amount of service credit available in the NPPS (i.e. the number of years of pensionable service in the NPPS that the transfer value will buy), so that you can decide whether to proceed with the transfer or opt to retain the alternative benefits available from your previous scheme.  A transfer of pension rights from another pension scheme might not result in the same length of pensionable service in the NPPS. A transfer of pension rights from a private sector pension arrangement might result in a small amount of service credit compared to the length of your previous employment, if the benefit structure of the private sector scheme is less generous than the NPPS.

 

Transferring Benefits out of the NPPS

 

If you leave the scheme and have two or more years’ qualifying service (or if you transferred pension rights into the NPPS from a personal pension scheme) you can:

 

  • transfer your NPPS pension rights to a registered occupational pension scheme with defined benefits; or

  • retain deferred benefits within the NPPS.

If you leave the Scheme with less than two years membership, the alternative to a transfer to a defined benefits scheme is a refund of pension scheme contributions; of if you have at least 3 months membership, a cash equivalent transfer value (CETV).

 

The Pension Schemes Act 2015 restricted transfers out of unfunded defined benefit public service schemes, which includes the NPPS, except to other defined benefit schemes, unless certain conditions are met. These changes came into effect from 6 April 2015,  and as a result it is no longer possible to transfer your NPPS benefits to an overseas pension scheme or a defined contribution (DC) scheme from which the benefits provided in respect of the transfer credits/rights are flexible benefits, unless you have less than 2 years qualifying service in the NPPS. Flexible benefits are defined as:

 

  • a money purchase benefit,

  • a cash balance benefit, or

  • a benefit, other than a money purchase benefit or cash balance benefit calculated by reference to an amount available for the provision of benefits to or in respect of the member (whether the amount so available is calculated by reference to payments made by the member or any other person in respect of the member or any other factor)

 There are a number of issues to consider before making a transfer:

 

  • you may wish to seek the help of an independent financial advisor before making any decisions

  • 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)

  • you are not entitled to a transfer out of the NPPS 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 65

  • 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 NPPS

Link to Scottish Government Website