The first step is to find out your cash equivalent transfer value (CETV). This is the cash value the scheme will offer you as an exchange for you giving up your defined benefit pension rights.
You can get this by asking your scheme administrator or pension provider. They might ask you to do this in writing, and give you a form that you need to complete.
If you qualify for a CETV, this must be provided within three months of you asking for a transfer value.
The scheme administrator or pension provider will then give you a Statement of Entitlement. This is a written document that sets out:
- your transfer value
- details of the benefits you’ve built up under the scheme
- information that your new scheme will need if you decide to proceed with the transfer.
There might also be extra forms included to start the transfer process.
The transfer value is guaranteed for three months. You must have left your scheme and no longer be an active member for this to apply. If you’re still an active member, the guaranteed transfer value won’t apply.
If you decide to transfer to a new scheme and the value of your defined benefits is more than £30,000, you’ll need to provide evidence to your scheme administrator or pension provider that you’ve taken regulated financial advice about the transfer.
Because of the timelines involved it's a good idea to speak with a regulated financial adviser before you start the process of getting a transfer value. This will help make sure any financial advice can be given in a timely manner and allow you enough time to consider the advice without being rushed.
When all the paperwork that the scheme requires is received, they must pay the benefits across to the new scheme within six months from the start of the transfer process.
If you don’t complete the transfer process within the three-month period that the CETV is guaranteed for, you might have to apply for another CETV. There might be a cost for this. This could delay the transfer and the CETV could be higher or lower than the amount before. This could mean that any advice that has been provided will need to be re-assessed.
When you’ve transferred to a new scheme, you’ll usually have given up all benefits under the old scheme. Some schemes will let you transfer only a part of your benefits. You’ll need to check with your provider to see if they offer this option.
You can usually transfer a defined benefit pension to a new pension scheme at any time up to one year before the date when you’re expected to start taking your pension.
When you start taking your pension, you can’t usually move your pension elsewhere.
Not all workplace pension schemes, or personal pensions accept transfers. So, it’s important to check first. It might also be possible to transfer your benefits to an overseas pension arrangement.