You may be leaving service with a preserved/deferred pension or have joined quite recently and be considering transferring your benefits. Before you take the leap, it is worth knowing the transfer rules and issues to consider.
In a nutshell:
- Deferred/preserved pensions may be transferred out. Once in payment, they may not be transferred out.
- Those who serve more than 3 months but less than 2 years have 6 months from leaving the Armed Forces to apply for the pension value to be transferred to another Defined Benefit (DB) scheme.
- Benefits may not be transferred to an overseas scheme or a Defined Contribution scheme.
- Armed Forces Pension Scheme (AFPS) benefits may be transferred out until one year before the age at which they are due to be paid. Other DB schemes may also have time limitations for transfer, so do check.
- Benefits may be transferred in to AFPS 15 within 12 months of joining the Armed Forces.
The process is straightforward:
- Write to Veterans UK asking for a ‘statement of entitlement’ to obtain the valuation.
- Ask your new scheme administrator what this value will buy in their scheme.
- If you decide to go ahead, apply for the transfer value payment, specifying the scheme to which it should be made. This agreement is irreversible, and you will have no residual rights or benefits in your old scheme.
In reaching your transfer decision, you need to consider and compare such things as the age at which benefits are payable in your new scheme, the indexation arrangements and ill health/family benefits. Do remember, if you decide to leave your AFPS benefits where they are, you can claim them whilst still working and building up a pension in your new employment.
We are NOT saying that it is always wrong to transfer out of an AFPS – it is not. For example, a transfer into your new scheme could mean that you do not have to serve any qualification period it might have. We just ask that you understand all the implications before doing so – you will find further information in MMP/129 which is available on the internet.
Finally, a little good news for those with deferred AFPS 15 benefits. If you take up public sector employment within 5 years of leaving the Armed Forces, you will automatically qualify for benefits in your new scheme because of the continuity rule – and you do so without transferring AFPS benefits.
September 2024
