Transfers out

If you leave FPS 2015 because you leave employment with your fire and rescue authority, or because you opt out of the Scheme, it may be possible to transfer your accrued pension rights to another pension scheme or arrangement.

There are various requirements and limitations in relation to the transfer of pension rights: some are contained within the Scheme regulations and some are set out in Finance and Pension Scheme Acts. The transfer would take place only if you so instruct, if the authority are satisfied that it would be permissible under the various sets of transfer rules, and if the administrators of the arrangement to which the transfer would be paid are prepared to accept it.

Initially you would make a written request to the authority to provide a "statement of entitlement". This would set out details of the transfer value - a sum representing the capital value of your pension rights, assessed in accordance with guidance provided by the Scheme Actuary. The figure will be linked to a "guarantee date" and may have to be reassessed if action is not taken within this time scale.

Be certain that you understand the effect of the transfer of pension rights, e.g. the type and amount of pension the transfer will "buy" in the receiving scheme or arrangement, and the terms under which you can draw it.

If you wish to proceed with the transfer you must give written notice to the authority, stating the scheme or arrangement to which the transfer payment is to be made, and taking note of any time limits as advised by the authority in which you may do this.

The above principles would also apply in respect of a transfer of pension rights to fire and rescue authorities in Wales, Scotland or Northern Ireland. However, if you leave employment with one English fire and rescue authority to transfer to another, where you remain a member of FPS 2015, different transfer arrangements will apply. No transfer payment would be made. Your former authority will provide you with a certificate setting out the entries in your pension accounts held by them and give details of your period of pensionable employment. This would be done automatically if there is no break between your employments. If there has been a break in pensionable service, but not exceeding 5 years, the certificate would be provided at your request. You must give the certificate to your new authority so that they can transfer the details to your new pension account with them.

Special arrangements apply if you hold more than one employment with either or both authorities; you may have to choose from which account, or to which account, the details should be transferred. Your new authority would explain this to you.

If the break in pensionable service is 5 years or more, you would retain your deferred pension account with your previous authority – a transfer to a new active account would not be possible. But if you had an added pension account, it may be possible to transfer the entries in that account to your new employment.

You should check the details in the certificate issued by your former authority. If you believe the details to be incorrect you have the right to challenge their accuracy; if you remain dissatisfied you would have a right of appeal under Internal Dispute Resolution Procedures.

Also, your new authority will check with your previous authority that all the appropriate details have been supplied and will then confirm that the transfer has taken place. Your previous authority will close all the pension accounts containing entries which have transferred.

You should think carefully before deciding to go ahead with a transfer

Your deferred benefits are valuable pension savings that keep pace with the cost of living both before and after you take them. They also include generous death benefits for your dependants.

You should compare these benefits to the benefits a transfer would provide for you before making any decision to transfer. MoneyHelper gives clear unbiased advice and information about all sorts of financial matters. You may find some useful information about transferring pension rights at www.moneyhelper.org.uk.

Taking financial advice, whilst important in being able to assess all your options, can be very daunting and expensive. In recognition of this a Guide to Good Practice for financial advisers has been created by the Personal Finance Society. We strongly suggest you read this to help you better understand what good advice looks like. You can find this by visiting their website at www.thepfs.org/about-us/professional-standards/

The Financial Conduct Authority (FCA) have published a series of videos to help members better understand financial advice on transferring out of a defined benefit pension scheme like the FPS. You can view the video here

They’ve also put together some information to help members considering transferring out understand the value of the benefits they would be giving up. You can read this here

Some questions members often ask before they choose a financial adviser are:

  • Do you have permissions from the Financial Conduct Authority (FCA) to give me advice on whether I should transfer my safeguarded pension rights?
  • Are you only going to be able to recommend a restricted selection of alternative choices or can you recommend any suitable product?
  • Do you or your business have your own products or funds which you may recommend to me? If you do, how much money do I pay if you recommend those funds and products, in addition to the fees I might pay for advice or for your services?
  • What are you going to charge me for the advice you will provide?
  • If you are not going to charge me, unless you recommend a transfer, how can you prove this will not influence your advice?

You can find authorised independent financial advisers by searching the FCA register at: https://register.fca.org.uk, searching https://www.unbiased.co.uk or contacting the Citizens Advice Bureau. You should check to see whether an adviser carries the Gold Standard Mark.

TPR, the FCA and the Money & Pensions Service (now part of MoneyHelper) have produced this ‘warning’ letter for members thinking of transferring from a defined benefit (DB) scheme like the FPS to a defined contribution (DC) scheme. The letter points out that in most cases this is unlikely to be in a member’s best long term interests.