Transfers out

General code in force: 28 March 2024

1. Members have a statutory right to transfer if certain conditions are met¹. When deciding to grant statutory transfers, governing bodies must carry out appropriate checks to decide if one of the conditions for transfer are met². Governing bodies should also be aware of the risks of pension scams, see Scams. Governing bodies should ensure that they have the necessary administrative procedures to deal with transfer requests, without undue delay and in line with scheme rules and the law.
2. Governing bodies should also maintain accurate and complete records of all requests received and the transfers that have been made. See Planning and maintaining administration, Financial transactions and Record-keeping for more information about our expectations in these areas.
3. The transfer process under legislation will typically begin when the governing body receives a request from an eligible scheme member. For a defined benefit (DB) member the governing body will prepare a statement of entitlement which will include the cash equivalent transfer value (CETV). The governing body must provide the statement within approximately three months of receiving the request, unless this information has been provided in response to a request in the previous 12 months³.
4. For a member with DB benefits, the CETV represents the actuarial calculation of the member’s benefits within the scheme. As part of the calculation⁴, the scheme actuary and governing body will be required to make assumptions about the course of future events affecting the scheme and the member’s benefits.
5. For a member with defined contribution (DC) benefits, the transfer value will be the total of the accumulated contributions made by and on behalf of that member. This sum will include any investment gains or losses.

Transferring member benefits

6. Before a governing body processes a request to transfer member benefits, there are certain checks it should perform. There are also specific requirements that must be met for members wishing to transfer from a DB scheme to a DC arrangement. The requirements and our expectations for transferring member benefits can be found below.
7. Before transferring member benefits the governing body:
   1. must check the receiving scheme to ensure it is⁵:
      • able to accept the transfer
      • willing to accept the transfer
      • a scheme to which a transfer can be made under the relevant legislation
   2. Must check one of the conditions for transfer are met to grant a statutory right to transfer⁶, or consider whether to grant a transfer on a non-statutory basis, if the scheme rules allow.
   3. Where neither condition is met, and they suspect the receiving scheme to be an illegitimate arrangement, they may refuse the transfer. See Scams.
   4. If they suspect the receiving scheme is an illegitimate arrangement, they should report it to Action Fraud.
   5. If they believe they will not meet the legislative deadlines, they should make an application to us before the deadline (see the extension section below).
8. Additional requirements for governing bodies of DC schemes:
   1. When the member contacts the governing body to request a transfer to access their flexible pension benefits, the governing body should explain the nature and purpose of Pension Wise guidance and must offer to book them an appointment. If the member prefers to book one themselves, the governing body must give the member Pension Wise’s contact details.
   2. The member can opt out from receiving guidance from Pension Wise, however the governing body must not proceed with their transfer application until they have confirmation that the member has received guidance or opted out.
9. The governing body of a funded DB scheme (but not LGPS):
   1. must notify us of transfers of more than £1.5m, or if lower, 5% of scheme assets⁷
   2. should monitor transfer requests and the impact those transfers could have on scheme funding or liquidity
   3. should consider the effect of a transfer on those members with a large transfer value relative to the scheme
   4. should be aware of any direction which may provide an exemption from any requirement to report

Specific requirements for DB to DC transfers

10. Scheme members must take appropriate independent advice when transferring benefits valued at £30,000 or more from a DB to a DC arrangement. The governing bodies of DB schemes that receive a request to transfer or convert safeguarded benefits of £30,000 or more, must check the scheme member (or survivor) has received appropriate independent advice⁸.
11. Members will receive written confirmation from their adviser, which they will be able to give to the governing body⁹. Governing bodies must check the adviser has the correct permission to give the advice¹⁰, by verifying their details on the FCA’s Financial Services Register. Governing bodies must not fulfil any request where the advice provided is not from an adviser whose firm is listed on the FCA’s register.
12. When checking the written confirmation that the member received the required advice, governing bodies should:
    1. Retain a copy of the written confirmation.
    2. Ensure records are held of:
       • who conducted the check
       • when this was conducted
       • the evidence that the firm or company providing the advice has permission to advise on pension transfers and pension opt outs before the transfer was made
    3. Retain these records for as long as may be relevant, in line with scheme policy, and subject to data protection principles.
    4. Be alert to the risk of fraudulent communications submitted to the scheme.
    5. Where suspicions arise, contact the advisory firm directly using the contact details as listed on the FCA register. Check that the firm has a record of providing the advice.
    6. Contact the transferring member immediately, if there is a problem with verifying the adviser’s permission. Inform them that the transfer will not proceed until the appropriate advice has been received.
    7. Keep payment records of the transfer, including details of the receiving bank account, and any confirmation of receipt by the receiving scheme.

Timeframes to complete transfers and extension requests

13. Governing bodies are required to complete transfers within six months.
14. For DB benefits, this is measured from the guarantee date provided in the statement of entitlement¹¹.
15. For DC benefits, this is measured from the date of the request for the transfer to be made¹².
16. Where a governing body is unable to complete the transfer in the required time, there are limited circumstances where we may grant an extension to this period¹³. Any application must be received by us before the six-month period expires. See our DB to DC transfers guidance for further details.

Glossary

Cash equivalent transfer value

The cash value of pension benefits, calculated in accordance with legislation. The value may change and is typically provided as at a certain date and (for DB benefits) can be guaranteed for a certain period.

Legal references

¹ Part 4ZA Pensions Schemes Act 1993 [Part 4ZA Pensions Schemes (Northern Ireland) Act 1993]

² Regulations 7 and 8 of the Occupational and Personal Pension Schemes (Conditions for Transfer) Regulations 2021.

³ Regulation 6 of The Occupational Pension Schemes (Transfer Values) Regulations 1996 [Regulation 6 of The Occupational Pension Schemes (Transfer Values) Regulations 1996 (Northern Ireland) 1996]

⁴ Part III of The Occupational Pension Schemes (Transfer Values) Regulations 1996 [Part III of The Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland) 1996]

⁵ Section 95(2) Pension Schemes Act 1993 [Article 91(2) Pensions Schemes (Northern Ireland) Act 1993]

⁶ Regulations 7 and 8 of the Occupational and Personal Pension Schemes (Conditions for Transfer) Regulations 2021

⁷ Section 69 of the Pensions Act 2004 and Pensions Regulator (Notifiable Events) Regulations 2005 [Article 110(1)(a) and (b) Pensions (Northern Ireland) Order 2005 and Pensions Regulator (Notifiable Events) Regulations (Northern Ireland) 2005]

⁸ Section 48 and 51 of the Pension Schemes Act 2015

⁹ Regulation 7 of the Pension Schemes Act 2015 (Transitional Provisions and Appropriate Independent Advice) Regulations 2015 [Regulation 7 of the Pension Schemes Act 2015 (Transitional Provisions and Appropriate Independent Advice) Regulations (Northern Ireland) 2015]

¹⁰ Regulation 11 the Pension Schemes Act 2015 (Transitional Provisions and Appropriate Independent Advice) Regulations 2015 [Regulation 7 of the Pension Schemes Act 2015 (Transitional Provisions and Appropriate Independent Advice) Regulations (Northern Ireland) 2015]

¹¹ Section 99 2(a) Pension Schemes Act 1993 [Article 95 2(a) Pensions Schemes (Northern Ireland) Act 1993]

¹² Section 99 2(b) Pension Schemes Act 1993 [Article 95 2(b) Pensions Schemes (Northern Ireland) Act 1993]

¹³ Regulation 13(a) Occupational Pension Schemes (Transfer Values) Regulations 1996 [Regulation 13(a) of The Occupational Pension Schemes (Transfer Values) Regulations (Northern Ireland) 1996]

Related content

• Dealing with transfer requests
• DB to DC transfers and conversions: detailed guidance