Pension Transfer Ban Update – NHS etc

[Andrew from Vista Financial]

Hello

 

As you may be aware there are changes coming into play as of the new UK tax year (April 6 2015) which will see certain pensions banned from being transferred, these pensions being government un-funded defined benefit schemes ie NHS, Police, Teachers Pension, Forces etc.

 

Please see previous thread/s written by me on this: http://www.pomsinadelaide.com/forum/money-finance/43609-government-response-uk-pension-ban-australia-qrops.html

 

Unfortunately the UK government have failed to confirm to this point the limited circumstances under which transfers from these pensions can continue which unfortunately means the state of play currently is that no transfers to Australia from these types of pensions can be made from April 6 2015.

 

Until now it has not been clear as to whether this deadline means that:

 

• the signed transfer paperwork needs to be received before this date;
  
• the Cash Equivalent Transfer Value (CETV) needs to be calculated before this date (which then gives a 90 day/ 3month guaranteed period); or
  
• the payment needs to be made before this date.
  

 

We have had an email from a contact at the NHS who has confirmed the following:

 

 

A little update for you.

 

The effect of the ban is still not clear or final. It does appear that the ban would affect transfers to schemes that offer flexible benefits, such as money purchase schemes. We will put something on the website as soon as we have something definite.

 

However we do know now that the completed original transfer forms have to be received by us no later than 05/04/2015 in order for the transfer to be paid. This at least gives you an indication as to deadlines.

 

To facilitate the timescales for overseas cases, we are going to issue an instruction today to issue guaranteed transfer values on all overseas transfers where the member has left. Therefore no estimates should be issued from today unless the member is still active in the NHSPS. Although the transfer value itself will still be guaranteed for 3 months as per the Pensions Act, it is important to note that the deadline will actually be that the forms are received back by us no later than 05/04/2015, no matter the guarantee date.

 

There is still a decision to be made as to when we reject a request because it would not be feasible for the deadline to be met and this will be detailed on our website when decided.

 

 

As you can see from the above for a transfer to be able to occur the signed transfer paperwork must be received by the end of the current UK tax year (5 April 2015). These details have been provided by the NHS but I would assume that the other pension schemes will also be following this protocol.

 

As I have continued to make clear these changes do not affect your pension if you decide not to transfer and you will still be entitled to your usual pension benefits at your usual retirement date, they are not lost!!! I have heard of comments from banks and salespeople trying to scaremonger people into transferring by suggesting otherwise, NOT TRUE.

 

A transfer may or may not be beneficial for you and your circumstances depending on a number of factors and being that these are final salary pension before embarking on a transfer I would strongly recommend that professional financial advice is sought.

 

 

Kind regards

 

Andy