A Guide to Police Pension Transfers
We have helped lots of current and former police officers who have come to us for advice about whether transferring their police pension is a good idea and how they can do it.
We’ve included the key information you need to know about pension transfers as well as where you can turn to for advice.
The following topics are covered below:
- Can I transfer my police pension?
- Where can I transfer it?
- What should I consider before transferring my pension?
- Should I transfer my pension?
- Calculating pension transfer values
- How to transfer your pension
- Talk to a pensions expert
If you would like to talk to a professional about your pension, get in touch. You can also find more general information about pension transfers.
Can I transfer my pension?
Some people wonder whether transferring their police pension to a private pension scheme could provide them with higher pensionable income, as private pensions often offer investment opportunities.
However, because of the nature of investment funds, these come with risks. For example, if you were to transfer your pension to a private scheme and the pension provider’s investment strategy failed, you could lose your money.
Following on from this, since 2015, it has not been possible to transfer a police pension into a defined contribution scheme.
In fact, in order to transfer your pension, the new scheme must be a government-approved scheme.
It’s also important to note that if you would like to transfer your police pension, you may be required to do so up to a year before you’re expected to start drawing retirement benefits.
Where can I transfer my pension to?
Depending on your circumstances, you may be able to transfer your police pension to:
- Another public service pension scheme such as a civil service pension
- Another pension scheme which is registered with HM Revenue and Customs
Transferring your police pension can have a huge impact on your income when you retire, and therefore, before making this decision always seek professional advice. To discuss whether transferring your pension to a civil service pension or another eligible pension scheme is a good idea, talk to one of the experts we work with.
What should I consider before transferring my pension?
To help you make an informed decision we have provided some points to consider:
- Some pension schemes can have time limits. For example, your new pension scheme may require you to have transferred your funds within 12 months of joining their scheme.
- If you decide to transfer, your pension will be transferred in the form of a cash equivalent transfer value. This could mean that the amount in your new pension pot decreases once it has been transferred.
- Always check the new scheme’s terms and conditions for any fees or charges. You might be expected to pay a transfer fee or an exit fee and the cost of this could reduce your pension pot and therefore cancel out any financial gains you were expecting to make in the new scheme.
- If you have more than one pension, you may want to combine your pots to manage them more efficiently. However, this can mean that you lose some or all of the benefits that you may have been entitled to if you had stayed in your police pension.
Should I transfer my pension?
A police pension can provide a reliable and steady income during retirement for those that have contributed throughout their career in the force.
The average police officer is entitled to an annual contribution of 1/55.3th of their earnings.
A benefit of being enrolled in a police pension is that this rate is revalued each year by the consumer price index, meaning that it will keep pace with the rising cost of living.
As well as this, police pensions can also include features such as death benefits.
However, if you decide that you would like to transfer your pension to another qualifying scheme, the advisors we work with are happy to provide confidential and informed advice.
In order to ensure that a pension transfer is in your best interests and will not lose you money, the advisors we work with will need to calculate your pension transfer value.
Calculating pension transfer values
A transfer value is the amount your pension pot would be worth once you have 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.
There are many variables that can affect how much your transfer value is. These include:
- Your age
- The date you are thinking of retiring
- How long you have worked been employed by the police force
- The police pension scheme you are in
Where can I find my police pension’s transfer value?
Your scheme administrator can provide you with a pension transfer value, stated in writing by post or via email.
However, they may not be able to provide specific advice about what you should do moving forward with your pension pot.
A pensions advisor can take the time to present you with an accurate figure as well as a breakdown of the best pension options for you based on your circumstances.
Tailored advice can sometimes be the difference between making or losing money on your pension. Speak to an advisor for more information.
How to transfer your pension
If after receiving professional advice you decide you want to transfer your pension, you will need to follow the below steps.
- Inform your current pension scheme administrator about your decision to transfer your pension.
- Complete an application form to request the transfer. You will need to provide information about the new qualifying scheme that you wish to transfer your funds to. Some people can find this a bit daunting so working with a pensions advisor who can fill out forms on your behalf can help.
- In addition, 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 one of the pension experts we work with who can show you how to start the process and make sure the right documents are sent within the time frame.
Can I opt out of my police pension?
Yes, if you feel that you no longer wish to pay into a police pension, you have the right to opt out. To do this, you need to send written notice to the police pensions authority. However, it’s important that you understand the potential consequences of opting out.
If you opt out and then later died during your service as a member of a police force, you would not covered for death in service benefits. This would mean that no death grant is payable to your family.
If you are considering leaving your police pension, speak to a pensions advisor who specialises in police pensions.
They can provide you with a detailed breakdown about what you can expect if you decide to leave and how this will impact your finances when you reach pensionable age.
Can I opt back in?
If you opt out of the 2015 Scheme you can rejoin at a later date. However, when you apply to rejoin, you may be asked to undergo a medical examination.
The results from the examination will be used to determine whether you will be eligible for ill health benefits.
What happens to my pension if I transfer to a different force within the UK?
Police officers who have moved or are planning to move to a new department outside of England but within the UK, ask us how this can affect their pension.
The good news, is that as long as your new job within the police force is situated either in Wales, Northern Ireland or Scotland, your pension entitlements will not change.
Talk to a pensions expert
If you need more information or would like to talk to a professional about transferring your police pension, please contact us on 0808 189 0463.
A pension specialist will be happy to help with whatever questions you have and our advice is always confidential. Alternatively, make an enquiry here and a member of the team will be in touch shortly.