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NHS Pension Scheme
Information about Transfers
Overseas
SDTO
Introduction
This leaflet contains This booklet is a general
information about important guide. It is not a full
changes to the HM Revenue & statement of the law which
Customs (HMRC) tax rules governs transfers overseas.
with effect from 6 April 2006.
1
Contents
Introduction Page 2
Background Page 4
Guaranteed Minimum Pension Page 4
Transfer calculation Page 7
Date of Residency Page 7
NHS Benefits Page 7
2
Background legally required to complete
the transfer. The NHS
From 6 April 2006 (known Pension Scheme will not
as ‘A’ Day), HM Revenue & complete individual
Customs (HMRC) replaced proposal forms.
the way it limited tax-free
pensions in UK schemes Guaranteed Minimum
with an individual lifetime Pension (GMP) / Section
allowance. Pension Funds 9(2B) Rights
must be tested against the
standard lifetime allowance
If the member was
at each benefit payment or
contracted out of the State
in certain transfers
2nd Pension (S2P), the NHS
overseas.
Pension Scheme takes on
the liability to pay a pension
From ‘A’ Day a member of
at least equal to the S2P or
the NHS Pension Scheme
one that satisfies the
will only be able to transfer
Reference Test under the
pension rights overseas if
Pensions Act 1995.
the receiving scheme is
registered with HMRC as
Contracted-out
either a Registered Pension
membership post April
Scheme or a Qualifying
1997 is known as Section
Recognised Overseas
9(2B) Rights. Any added
Pension Scheme,
years, doubled years and
(QROPS).
some transferred-in
membership do not form
The transfer statement and
part of the Section 9(2B)
the information provided in
Rights.
this booklet are all that is
3
Transferring contracted-out scheme to provide any
membership is at the particular value or benefit in
member’s own risk. When return for the transfer
the member retires, it is payment.
possible that the pension
benefits they receive from They will be accepting that
their new scheme may be once the transfer payment
less than the benefits they has been made, the
would have received in the provisions of paragraph
NHS Pension Scheme, or 5(3B) of Schedule 2 to the
the S2P in the UK. The 1993 Act and Part VI of the
member, their spouse or Contracting-Out
civil partner, would have no Regulations 1996
claim against the NHS (Premiums and Return to
Pension Scheme or the the State Scheme), will not
S2P for any shortfall in the apply in relation to the rights
benefits paid by their new for which the payment has
scheme. been made.
When signing the For those members with
transfer option forms the deferred benefits, if the
member will be signing to receiving scheme is
say they understand this unable to accept the
and that the scheme to liability for any GMP/
which the transfer payment Section 9(2B) Rights, it
will be made may not be will be necessary for the
regulated in any way by the member, after taking advice
law of the UK. As a about the best option for
consequence, there may them, to choose to
be no obligation under that discharge the liability by
law on the receiving either:
4
1. Securing these rights in cover the liability and will be
a Registered Pension shown in our documentation.
Scheme, which is either a Form TV18OPI should be
Section 32 Buy Out Bond used. Please note that GMP
or Appropriate Personal will be payable from State
Pension in the UK. Pension Age, not
necessarily age 60, but
The transfer amount Section 9(2B) Rights are
payable will be reduced by payable at age 60.
the amount required to
cover the liability. The The transfer is at the
option forms TV18OPI, member's own risk and
TV18PP or TV26 would be there is a possibility that they
used. It is the responsibility may lose discretionary
of the receiving scheme to benefits from the NHS
engage the services of an Pension Scheme.
Insurance Company,
based in the UK, to secure For members who do not
the liability for GMP/ have deferred benefits,
Section 9(2B) Rights in a the liability will be discharged
registered pension by payment of a CEP
scheme. (Contributions Equivalent
Premium) to HMRC National
Or Insurance Contributions
Office (NICO) and the
2. Leaving the liability with amount payable will be
the NHS Pension Scheme. reduced by the amount
required to pay the CEP.
The transfer amount This option will be shown in
payable will be reduced by the transfer documentation if
the amount required to applicable.
5
Some members have no the meaning of Section 1 of
GMP/Section 9(2B) Rights the Pension Schemes Act
liability. If this is the case, 1993 which:
please use option form
TV18E. 1. In the case of a scheme
established on or after 6
Transfer Calculation April 2006, is a registered
pension scheme for the
If your approval letter from purposes of the 2004 Act,
HMRC confirms your status or
as a QROPS, the member
is entitled to a Cash 2. In the case of a scheme
Equivalent Transfer established before that
Calculation. A transfer is date, was:
only possible if the member
left the NHS Pension (i) Approved by HMRC for
Scheme on 1 January 1986 the purposes of Chapter 1,
or later. Part XIV of the Income and
Corporation Taxes Act
If HMRC approval confirms (ICTA) 1988;
the status of the receiving
scheme as a Registered (ii) A statutory scheme as
Pension Scheme and it is defined in section 612(1) of
also an occupational the ICTA 1988;
pension scheme, the
transfer calculation may (iii) A scheme to which
offer reserved rights. An section 608 of the ICTA
occupational pension 1988 applied and on 6 April
scheme is defined in the 2006 became a registered
NHS Pension Scheme pension scheme for the
Regulations as one within purposes of the Act 2004.
6
If applicable, a reserved NHS Benefits
rights calculation is the
higher of: Benefits payable from the
NHS Pension Scheme are
1. an old style calculation index linked. This means
for membership before 29 they are protected against
January 1988, with interest, inflation.
plus;
Benefits will normally be
2. a CETV calculation for paid at age 60, when any
membership after 28 further cost of living
January 1998, compared increases will be added.
with; Benefits may be paid earlier
if the member becomes
3. a CETV calculation for all permanently unable to do
membership; any regular work.
and is subject to the If the member was classed
member satisfying the time as a Mental Health Officer,
limits defined in the their benefits may have
Scheme Regulations. been increased because of
the special provisions
Date of Residency relating to them.
A member of the NHS Payment should only be
Pension Scheme is entitled requested when the
to one transfer value receiving scheme will pay a
statement per year and this Lump Sum in accordance
will be at current date. NHS with the Reference
Pensions will not provide an Scheme rules under the
additional value as at date Pensions Act 1995.
of residency.
7
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