At a Glance
✓ Transferring out is an important decision that may affect your future pension benefits.
✓ Independent financial advice may be required before a transfer can proceed.
✓ Additional checks will be carried out to help protect members from pension scams.
✓ Charges, timescales and transfer rules may apply.
What should I know before transferring out?
Transferring your pension benefits out of the LGPS is an important decision and should be considered carefully.
Gwynedd Pension Fund cannot advise you whether transferring out is appropriate for your circumstances. You may wish to seek independent financial advice before making a decision.
Can I transfer my benefits?
You can only transfer your benefits if you have stopped paying into the LGPS.
If you are still an active member of the scheme, you will need to opt out before a transfer can be considered.
You cannot transfer benefits if you are already receiving an LGPS pension in your own right.
Is there a time limit for transferring?
You must normally apply to transfer your benefits at least one year before your Normal Pension Age or one year before your State Pension Age, whichever is earlier.
If you have more than one deferred LGPS benefit in England and Wales, all benefits will need to be transferred at the same time.
What should I consider before transferring?
LGPS benefits offer several valuable protections, including:
- A guaranteed pension.
- Protection against inflation.
- Protection for your family.
- No personal investment risks.
- The possibility of ill-health benefits.
- No ongoing management fees or charges.
What is a Cash Equivalent Transfer Value (CETV)?
You can request one free Cash Equivalent Transfer Value (CETV) within a 12-month period.
If you make a further request within the same period, a fee may be charged.
How do we protect you from pension scams?
Pension scams are increasing and could result in the loss of some or all of your pension savings. If you apply to transfer your pension, we are required to check for signs of a scam, known as red flags and amber flags.
Red flags
A red flag indicates a high risk of a scam. For example:
- There is insufficient evidence that you are connected to the relevant scheme or employer.
- You have received advice from someone who is not authorised.
- The transfer was promoted through unexpected calls, messages or emails.
- You were offered an incentive to transfer or feel under pressure to do so.
If a red flag is identified, we must stop the transfer.
Amber flags
An amber flag suggests that there may be a risk. For example:
- The scheme includes high-risk, complex or overseas investments.
- The scheme's charges are unclear or high.
- There is an unusual pattern of transfers to the scheme or through the same adviser.
If an amber flag is identified, you will need to attend an appointment with MoneyHelper and provide evidence that you attended before the transfer can proceed. If the evidence is not provided, we must stop the transfer.
You should be particularly cautious of schemes that promise access to your pension before age 55.
You do not need these checks if you are transferring to certain types of authorised schemes, including public service pension schemes.
What is "Freedom and Choice"?
The LGPS is a defined benefit scheme. The Government's "Freedom and Choice" rules do not apply directly to your LGPS benefits. You would need to transfer your benefits to a defined contribution scheme before those options could be used.
Do I need independent financial advice?
It is strongly recommended that you seek independent financial advice before transferring pension benefits.
If your CETV is worth more than £30,000 and you are transferring to a defined contribution scheme, you are legally required to obtain independent financial advice.