Civil Service Pension Transfers
A Civil Service pension is widely regarded as a good option for most public sector workers as it often provides generous benefits, which can accumulate over time.
The retirement income received from a Civil Service pension is based on the salary earned during employment, and because the scheme is not privately owned, the risk is perceived as lower for those that participate.
Despite this, some people consider transferring their pension fund into a different pension scheme, with hopes that they can invest their money into a riskier yet potentially more financially viable scheme.
You’ll find the following topics covered below…
- Can I transfer my Civil Service pension?
- Where can I transfer my pension to?
- Should I transfer?
- How can I calculate my transfer value?
- How to transfer your pension
- Can I transfer into a Civil Service pension?
- Can I rejoin a Civil Service pension?
- Talk to an expert
If you would like to talk to a professional about pension transfers, call 0808 189 0463. Alternatively, make an enquiry and a pensions specialist will be in touch.
Can I transfer my pension?
Yes. You can apply to transfer your Civil Service pension to another scheme as long as the pension plan you want to move to is an eligible scheme.
If you have worked for the goverment for less than two years and decide to transfer out of your pension, there are two options:
1. Receive a refund of your contributions
2. Have a cash transfer sum which you can transfer to a new pension scheme
Are all Civil Service pensions the same?
No. There are five variations plus an additional option, named ‘partnership’ which is a defined contribution pension scheme.
The type of pension you get depends on when you were employed and you’ll make the same contributions on each variation.
The variations include:
- Classic plus
If you are considering transferring your Civil Service pension, it’s important to check beforehand with your pension provider or employer to see which variation of the scheme you are part of.
Where can I transfer my pension to?
- A registered defined benefit (DB) pension scheme
- A registered occupational pension scheme that is a member of the Public Sector Transfer Club (commonly referred to as ‘the Club’)
- A registered insurance company to purchase one or more annuities which satisfy the requirements made by the Secretary of State of the Treasury
To discuss which option may be best suited to your situation and needs, talk to an advisor.
Can I transfer to a SIPP?
No. Since April 2015, transfers to schemes that provide ‘flexible’ benefits are not permitted. This also includes stakeholder pension (SHP) schemes and private pensions.
Can I transfer to a defined contribution pension?
Again, not since April 2015 have civil servants been able to transfer their pension to a defined contribution scheme.
Should I transfer my pension?
Every situation is different, so there is no ‘one size fits all’ answer to whether or not you should transfer your pension.
What is clear though, is that before you do, it is advisable to seek financial advice from a professional as well as guidance from a pensions advisor who has helped people transfer their funds before. You can do so by making an enquiry with us.
If you transfer your Civil Service pension to a private scheme, the value of your investment can go down as well as up, meaning that there is a chance that you lose money. Some pension members decide that this risk is too high, especially if they are near retirement age.
In order to make your decision clearer, you will need to calculate how much your pension will potentially be worth in each scenario.
How can I calculate my transfer value?
A transfer value is the amount your pension pot would be worth if you moved it to a different provider.
This is sometimes referred to as a cash-equivalent transfer value (CETV).
It can be difficult to calculate your transfer value, especially if you’ve never had to do it before. The variable that can affect how much your transfer value is are as follows:
- Your age
- The date you are thinking of retiring
- How long you have worked within Civil Service
- The Civil Service pension scheme you are in
You can request a transfer value quote from your scheme administrator in writing, by post or email.
Alternatively, contact a pensions expert who can calculate it for you.
How to transfer your pension
When you get the estimate of your refund and cash transfer sum, you will need to inform your pension scheme administrator about which option you would prefer. You then need to provide details of where you want to transfer your benefits to.
Once you have started the process of transferring your pension, you will have three months to complete the forms necessary to transfer. Your new pension provider will also need to complete the relevant discharge papers to enable the transfer to be paid.
If you are unsure about how to fill in your application to transfer, speak to a pensions advisor who can show you how to start the process and make sure the right documents are sent within the time frame.
Do I have to leave my job if I transfer my Civil Service pension?
No. If you opt out of your pension or transfer it to another scheme, your pension will be preserved and your job will not be affected.
Can I transfer into a Civil Service pension?
Yes, transferring your pension to a Civil Service may be possible.
If you currently pay into a pension with another scheme, perhaps through an NHS pension or a private pension, you can transfer your funds and potentially your benefits into a Civil Service pension.
You will need to complete a pensions choices form and pass this on to your new employer. They will then fill out the necessary information and send the form to Civil Service Pensions (CSP).
CSP can then request transfer details from your previous pension scheme. This information allows CSP to calculate your transfer and let you know how much pension or benefits it will buy you into a Civil Service pension.
Once you have this, you can decide whether you want to proceed and transfer into the Civil Service pension scheme.
Can I transfer a pension from the military to the Civil Service?
Yes. There are restrictions as to where you can transfer your military pension but it is possible to transfer it to a Civil Service pension or another defined benefit scheme.
You will not be able to transfer your military pension to an overseas or defined contribution/private pension scheme. If you do decide to transfer your military pension to a Civil Service pension, you must do so within 12 months of being eligible to join the new pension scheme.
Transferring your military pension can be financially beneficial, however, in some cases, you may end up having to wait longer to receive your pension payout compared to if you had stayed with your original military pension.
Because of this, it’s important to be aware of the effects that transferring your pension could have on your finances when you retire.
Speak to a pensions expert who can look into this for you and explain the implications of each of your options.
Can I rejoin a Civil Service pension?
Whether you can rejoin your original Civil Service pension scheme depends on how long you have had a break from it.
If you have had a gap of more than five years between leaving and rejoining, you will most likely need to set up as a new entrant. Your previous Civil Service pension fund will remain untouched and then your new contributions will go into a separate pot.
If you rejoin within five years or less, your preserved pension will be automatically linked to your new period of service. Essentially, it will be as if you had continued to be an active member during your time out of the scheme.
Talk to an expert
Your pension directly affects your retirement income, so it’s important to understand the effects of transferring your Civil Service pension.
If you need more information or would like to talk to a professional, a pension specialist will be happy to help with whatever questions you have and our advice is always confidential. Call us on 0808 189 0463 or alternatively, make an enquiry and a member of the team will be in touch shortly.