Transfers

Where a Receiving Plan received a transfer payment in respect of a member it would’ve provided the member with additional benefits. The style of additional benefits provided would vary between types of Receiving Plans and possibly between members within the same scheme. For example, where the Receiving Plan is a defined benefit (DB) scheme an individual may have been granted:

• an additional amount of pension (often a specified amount at retirement date)
• a service credit of additional years, or
• benefits which mirror those provided under the transferring scheme (this tends to be common on bulk transfers)

Where the transfer value included an allowance for a GMP and the Receiving Plan was a contracted-out salary related scheme it will have replicated the GMP (as notified by the Transferring Scheme) and agreed a GMP revaluation basis, usually in line with the Receiving Plan’s policy. Similarly, if the transfer payment included protected rights then these will have been converted into a GMP by the Receiving Plan if it was a COSR.

Transfers may have been the result of:

• an individual transfer – where a member requested a transfer value be paid from the Transferring Scheme to the Receiving Plan. Such individual transfers could be on either a statutory (Pension Schemes Act 1993) or a non-statutory (rules) basis; or
• a bulk transfer – under which the assets and liabilities relating to a class of members transferred from the transferring scheme to the receiving scheme, often without member consent (this typically happens as part of a scheme merger or following the sale of part of a business or corporate group).

Different considerations will apply depending on the type of transfer and the benefits provided.