A transfer is the movement of an individual’s pension rights from one scheme to another. The transferred funds become subject to the rules of the receiving pension scheme and that scheme then becomes responsible for paying the member’s benefits.
When you transfer into alpha, your previous scheme calculates the transfer value of your previous pension benefits. The Scheme Administrator (MyCSP), works out how much alpha pension that amount will buy you. If you are happy with the valuation you can apply for the transfer to go ahead.
Are all transfers the same?
There are two main types of transfer, a Club transfer and a non-Club transfer.
The Public Sector Transfer Club is a group of defined benefit occupational pension schemes, mainly within the public sector. The Club offers those who move between Club schemes the opportunity to transfer pension benefits on special terms.
When both schemes are part of the Transfer Club, it is called a Club transfer. If only one, or neither, is part of the Transfer Club, it is a non-Club transfer.
Can I transfer in my previous pension?
There are time limits for requesting a transfer in. You must apply to transfer in your pension in your first 12 months of becoming eligible to join alpha. For Club transfers, you must apply to transfer within five years of leaving the previous scheme.
Please note: an expression of interest into the possibility of transferring in your pension is not considered to be an application. An application is a signed declaration that you are happy for the transfer to proceed.
It is not always possible to transfer a pension, the Scheme Administrator (MyCSP) will let you know if it is not.
Non-Club transfers can come from any type of eligible scheme.
There is a limit to the maximum amount of alpha pension you can get from a non-Club transfer in. This limit is half (50%) of your annual rate of pensionable earnings on the day you became an active member of alpha.
How does a Club transfer in from a final salary scheme work?
A final salary scheme provides a pension based on your salary and length of service at the end of your career.
The alpha rules do not allow a final salary pension to be transferred into alpha. Your transfer will be added to nuvos, even if you have never been a member, but linked to your alpha pension. This will provide you with a final salary pension linked to your main alpha pension.
Although your transfer will be in nuvos, not alpha, it will still be included in any estimates or statements you get.
How does a Club transfer in from a Career Average (CARE) scheme work?
Career Average transfers can be added directly to your alpha pension, provided the transfer meets the eligibility criteria. A transfer credit will be added to your benefits. This credit will be adjusted each year but using the method / amount that your previous scheme would have adjusted your benefits.
Can I cancel my transfer?
You will have time to decide during the application process. You do not have to agree to transfer any of your previous pensions if you are not happy with the amount of alpha pension your transfer will buy. If you do not want the transfer to go ahead you should tell the Scheme Administrator (MyCSP) in writing as soon as you get your quote. You cannot change your mind once the transfer has been completed.
Do I have to pay any extra contributions if I transfer in?
No, the only extra funds that are added to your alpha pension come from your previous pension scheme.
Do I get any tax relief?
There are no special tax relief options when you transfer in a previous pension.
Are there any other tax issues?
Each tax year, the growth in all pension arrangements you have is measured against an Annual Allowance set by HM Revenue & Customs.
You will normally have to pay an Annual Allowance tax charge on any growth in your benefits that are over the Annual Allowance amount.
When calculating the growth in your benefits an adjustment is made for any transfers made on a Non-Club basis, the increase resulting from the transfer is offset.
Transfers made on a Club basis are assessed in a different way to account for changes in value from the old scheme to the new scheme.