APPENDIX 4: TRANSFER VALUES
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(Rules 9.1, 9.19, 9.25, 9.27 and 9.29)
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Transfer arrangements for members in employment from 1 June
1972 to 31 December 1985; and, in certain circumstances for members in the
interim period and/or transferees under the Public Sector transfer arrangements;
and for the purposes of calculating a mixed transfer value; the term "pensions
scheme" in this Appendix retains the meaning it had as at 31 December
1985, namely a contracted-out salary related occupational pension scheme
or non contracted-out occupational pension scheme.
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Outgoing transfer values
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| 1 |
A member leaving employment on or after 1 June 1972, and entering
pensionable employment outside this Scheme, may apply for a transfer value
to be paid to his new pension scheme in accordance with Paragraphs 2-9 (formerly
Rules 9.02 to 9.09) provided such scheme is approved for this purpose by
the HM Revenue and Customs and is prepared to accept the transfer value. This Rule
shall not apply:
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(i) |
where a member leaves employment on or after 6 April 1978
and his new employment is not contracted out employment by reference to
his new pension scheme under the Social Security Pensions Act 1975, unless
a Contributions Equivalent Premium has been paid on his behalf or he has
no guaranteed minimum in relation to this Scheme;
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(ii) |
in the case of any member who left employment before 3 May
1973 for whom a transfer value has been paid in respect of such transfer
in accordance with former Rule 23 (i)(c). |
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| 2 |
A transfer value shall not be paid if there is an interval
of more than 12 months between the date of the member’s leaving employment
and the date on which he enters pensionable employment outside this Scheme,
or if the application for the transfer value is made more than 6 months
after the transferee joins his new pension scheme. Provided that a member
who elects to have his pension benefits preserved and later becomes a member
of a pension scheme which will accept a transfer value, or becomes a member
of a pension scheme which initially will not accept a transfer value but
later agrees to do so, may apply in writing for a transfer value to be paid
to his new pension scheme instead of having his pension benefits preserved,
provided he makes such application for the transfer value within 6 months
of becoming a member of the new pension scheme or of being informed that
his new pension scheme will notwithstanding accept one. Provided also that
the Authority may allow a longer period than the interval of 12 months specified
above if they are satisfied that the delay was outside the member’s control
or where he has undertaken a period of appropriate training or education
before assuming new employment. |
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| 3 |
The Tables at the Annex to this Appendix will be applied for
the calculation of the transfer value, using the member’s age when he left
employment and his preserved pension benefits at that date. "Preserved
pension benefits" means personal pension, lump sum and (for all men
whether married or not, except in respect of service to which, by virtue
of Rule 6.14, neither Part 1 nor Part 3 of Section 6 applies) widow’s pension.
The preserved pension benefits will be calculated under Rules 5.09 and 6.04,
except that there will be no minimum period of qualifying service and no
deduction of contributions for family benefits will be made from the preserved
lump sum save in accordance with Rule 9.05. All male members save as aforesaid
will be treated as married and no regard will be paid to Rule 6.03. The
transfer value will be calculated in relation to the appropriate age shown
in the first column of Table 1 or Table 2 (as the case may be) at Appendix
4 and shall be the aggregate of: |
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(a) |
the sum shown in the second column multiplied by the gross
annual pension to which the member would be entitled at the date of transfer;
and |
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(b) |
the sum shown in the fourth column multiplied by the lump
sum to which the member would be entitled; and |
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(c) |
in the case of a male member (if applicable) the sum shown
in the fifth column multiplied by the amount of the widow’s pension which
would be payable on the member’s death; |
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less: |
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(d) |
the sum shown in the third column, multiplied by the annual
amount of the modification of the member’s pension which would be due under
Rules 4.08 to 4.11; and |
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(e) |
the sum shown in the last column, multiplied by the annual
amount of the member’s accrued guaranteed minimum pension; and |
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(f) |
any Contributions Equivalent Premium paid on behalf of
the member. |
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| 4 |
Where a transfer value is calculated for a member who has
opted for benefits under Rule 6.40 or 6.45, any contributions paid in respect
of such benefits, including any element for widower’s benefits in contributions
for added years under Rule 3.16, will not be included in the transfer value
but will be treated as follows: |
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(i) |
where the qualifying service is less than 5 years, any such
contributions paid will be refunded in the same way and subject to the same
additions and deductions as contributions refunded under Rule 6.11 (1),
and the member will cease to be eligible for the said benefits, any liability
for contributions by deduction from the lump sum under Rule 6.10 or 6.57
being cancelled; |
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(ii) |
where the qualifying service is 5 years or more, and the
member has paid such contributions in respect of service before 6 April
1975 and in respect of service of less than 5 years after 5 April 1975,
and he opts for a refund of all such contributions paid, the contributions
will be refunded to him in the same way and subject to the same additions
and deductions as contributions refunded under Rule 6.11 (1) and he will
cease to be eligible for the said benefits, any liability for contributions
by deduction from the lump sum under Rule 6.10 or 6.57 being cancelled; |
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(iii) |
in any other case, the member will be entitled to have the
benefits purchased by the contributions paid preserved, any liability for
contributions by deduction from the lump sum under Rule 6.10 or 6.57 being
cancelled. Alternatively, he may opt to have preserved benefits calculated
by reference to the whole of his reckonable service up to the time of transfer,
the liability for contributions by deduction from the lump sum being taken
into account in the calculation of the preserved personal benefits by reference
to which the transfer value is calculated. In either case, the preserved
benefits will be brought into payment on the date on which they would have
been brought into payment had the member remained in employment. |
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| 5 |
Where a widow’s pension is calculated for the purpose of Paragraph
3, any contributions therefore (including arrears of periodical contributions,
except where Rule 6.10(2) applies) not paid at the time of transfer will
be deducted from the preserved lump sum before calculation of the transfer
value. However, where contributions for a widow’s pension have been refunded
to the member under Rule 6.11 or 3.30 they may be repaid by the member (together
with, if the Authority so require, any income tax deducted therefrom) with
the addition of compound interest; and the member may pay the Authority
any sum due under Rule 6.12 instead of having it deducted from the preserved
lump sum. For the purposes of this Rule the reference to compound interest
means compound interest added to the relevant sum at a rate of 3 % a year
up to and including 5 April 1978, and 4 % thereafter, with yearly rests.
Any repayment of refunded contributions or payment under Rule 6.12 shall
be made within any appropriate time limit specified in paragraph 2 for the
payment of the transfer value. |
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| 6 |
(1) |
A transfer value paid before 1 April 1979 will be
increased by 6 % compound interest for each completed year of interval between
the date of leaving employment and the date of payment of the transfer value. |
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(2) |
A transfer value paid on or after 1 April 1979 will be
increased by: |
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(a) |
6 % compound interest for any completed year of interval between
the date of leaving employment and 1 April 1977; and |
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(b) |
2.25 % compound interest for each completed three months of
interval between 1 April 1977 or the date of leaving employment whichever
is the later and the date of payment of the transfer value; |
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except that no interest will be added to a transfer value
paid within six months of the date of leaving employment. |
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| 7 |
Where a member is at the date of his transfer in the process
of buying added years, or is paying additional contributions for previous
service under Rule 2.12, only the number of added years he has been granted
by that date (in accordance with Rule 3.26) or the previous service paid
for by that date will reckon for the purpose of the calculation of his preserved
pension benefits. |
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| 8 |
Where a return of basic contributions has been made under
Rule 5.13 or 5.17, a transfer value may be paid in accordance with the Rules
of this Section provided the sum actually paid to the member is repaid to
the Authority together with, in the case of repayment on or after 1 August
1984, interest at the rate specified in Rule 9.06 (2)(b), save that no interest
will be payable if the repayment is made within 12 months of the member’s
leaving employment. |
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| 9 |
A transfer value will not be paid in respect of service for
which a pension or annual compensation (under Section 7 or 8) has become
payable under this Scheme.
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