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Am I able to transfer pension benefits out of NFPS?

If you leave the NFPS having sufficient service to qualify for a pension but (i) not being eligible for immediate payment because you are not old enough, or (ii) retiring on grounds of ill-health, as an alternative to a deferred pension you could request that your pension rights should be transferred to some other pension arrangement.  A transfer value (a sum representing the capital value of your pension rights) would be assessed in accordance with guidance provided by the Scheme Actuary and offered to the trustees or managers of your new pension scheme. The transfer would take place if you so instruct.

You may leave employment with your current fire and rescue authority to transfer to another authority where you remain a member of the NFPS.  If the new employment is at a lower rate of pay, a split pensions option would be available to you.  Your pension rights normally transfer with you and a transfer value payment is made for any transfer either from or to a Scottish FRA.  Due to the financing system introduced in England, payments for transfers between English FRAs are no longer made.  However, a transfer value would be paid between an English authority and an authority in Wales, Scotland or Northern Ireland where different funding arrangements apply.

If you leave the scheme and have three or more months qualifying service (or if you transferred pension rights into the NFPS from a personal pension scheme) you can:

  • transfer your NFPS pension rights to a registered occupational pension scheme with defined benefits; or
  • transfer your NFPS pension to a registered overseas pension scheme (ROPS) that does not offer flexible benefits; or
  • retain deferred benefits within the NFPS.

The Pension Schemes Act 2015 restricted transfers out of unfunded defined benefit public service schemes, which includes the NFPS, 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 NFPS benefits to a flexible benefit overseas pension arrangement 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 3 months qualifying service in the NFPS.

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 (mandatory for cash transfers over £30,000)
  • you are not entitled to a transfer out of the NFPS 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 NFPS
  • overseas transfers may be subject to a 25% tax charge, details of which can be found here.

 

Link to Scottish Government Website