explained in more detail later in the booklet, but, in essence, the reason for this is that, because your pension is based on final salary, each year of reckonable service becomes more valuable the longer that you stay in the same scheme. If you leave, however, the PCSPS like other pension schemes will make a payment (or preserve your benefits) on the basis of your salary at the date of leaving, not on the basis of the salary that you might have had had you remained with the civil service until retirement. Your new scheme must, however, take account not only of any increase in salary you may have received on changing jobs but also of the likelihood that your past service will give rise to higher benefit because of future increases in salary.
Money purchase schemes are usually insurance based, and the transfer payment will be added to a fund that will be invested and generate a sum of money for use on retirement to buy a pension. Insurance policies (Section 32 policies) are similarly based and work in broadly the same way, except for any contracted-out benefits.
There are special arrangements if you are transferring between occupational pension schemes that are members of the Public Sector Transfer Club. The PCSPS is a member, as are most of the occupational pension schemes in the public sector and some in the private sector. Membership of the Club can change from time to time and there can be no guarantee that it will always comprise the same schemes. The Club operates in a way which will not penalise the transferee for any increase in salary between the old and the new employments. Club schemes with comparable benefits should give roughly the same service credit as that earned in the PCSPS but see pages 12 and 13. These special arrangements depend upon the requirements of the Club being met.
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Where those requirements, which are described on pages 12 and 13, are not met, transfers which take place between Club schemes will not have the special arrangements applied, and the information concerning non-Club transfers in this booklet will apply instead.
Prison Officers
The transfer arrangements that applied if you left employment as a Prison Officer before 1 October 1987 may differ in detail from those described in this guide and you should ask your department for further guidance.
The PCSPS and the State Earnings Related Pension Scheme
The PCSPS is contracted-out of the State Earnings Related Pension Scheme (SERPS) under the Social Security Pensions Act 1975. Guaranteed minimum levels of personal and widow's or widower's pensions as appropriate are, therefore, payable under the PCSPS in respect of contracted-out service, and your position in this respect will be taken into account when you leave the PCSPS.
Your decision
This booklet outlines the main factors that you will need to take into account in reaching a decision on whether to transfer your accrued pension benefits out of the PCSPS. Your department will answer any further questions you may have about the operation of the transfer arrangements. It cannot, however, give specific advice on the relative merits in individual cases of preservation and transferability: it is for you to decide whether to seek a transfer of pension rights.
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