to start with no accrued benefits in your new scheme and re-qualify for pension benefits. See also pages 12 and 13.
Non-Club transfer
FINAL SALARY SCHEMES
If
you are moving to a non-Club final salary pension scheme, the balance of advantage is less straightforward. If you are entitled to preserved benefits in the PCSPS you will need to decide whether the benefits provided by your new scheme in return for the transfer value are worth more than the value of your preserved benefits including pensions increase. If the benefits that the transfer value will buy are to be related to your pensionable pay when you finally retire, you should consider whether increases in pay in your new employment will make those benefits worth more than your preserved PCSPS benefits. Generally, if the service credit is to be related to pay at the time of retirement and you have quite a few years of potential service ahead of you, it could be to your advantage to have your benefits transferred.
If your new scheme's retiring age is 65 and you are nearing 60, your service credit could be restricted. It could therefore be to your advantage to opt to retain your preserved PCSPS benefits so that when you reach age 60 you would be able to draw your PCSPS benefits, plus your salary from your new employment, and when you reach age 65 you would be entitled to draw a further pension from your new scheme.
If you opt for payment of a transfer value to a non-Club scheme and later return to the civil service, service credit will be related to the amount of transfer value you are bringing back and you will probably therefore be offered a credit of
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less service in the PCSPS than you actually served, especially if you move on each occasion with a rise in salary.
MONEY PURCHASE PENSION SCHEMES (INCLUDING PERSONAL PENSION SCHEMES AND SELF EMPLOYED PENSION
ARRANGEMENTS) AND SECTION 32
POLICIES
If you are considering transferring your benefits to a money purchase occupational pension scheme, a personal pension scheme, a self employed pension arrangement or a Section 32 policy, you should bear in mind that the transfer value available from the PCSPS represents the actuarially assessed equivalent of your preserved benefits in the PCSPS. The product of a money purchase scheme or a Section 32 policy will not buy a higher pension unless investment returns or other factors are favourable. In comparing preserved PCSPS benefits with money purchase scheme and Section 32 benefits, you should:
i. note that the purchasing power of preserved PCSPS benefits is protected against inflation both before and after the benefits are brought into payment;
ii. establish whether the scheme or policy provides guaranteed benefits or merely an accumulation of the transfer value which will be used to buy an annuity, the amount of which will therefore depend upon investment returns over future years, and the extent to which, in either case, the projected pension is protected against inflation;
iii. consider carefully any illustrative projected pensions that are provided if the annuity depends upon future investment returns. You must decide
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