Deferred members of AFPS75 and AFPS05 are generally entitled to voluntarily take a transfer value to another pension arrangement. However, this right only applies to transfers to defined-benefit schemes from 6 April 2015; transfers to defined-contribution schemes and overseas schemes are prohibited.
This note covers transfers that are not made under the Public Sector Transfer Club arrangement (i.e. it covers non-Club transfer values or 'CETVs').
The circumstances under which members are entitled to take a CETV are set out in the regulations.
The calculation date used to calculate a CETV is defined as the 'guarantee date'. This date is relevant for the purposes of determining a member's age (taken as age last birthday at guarantee date in complete years) and for applying revaluation (from date of leaving to guarantee date).
The deferred benefits (member's pension, separate lump sum (if applicable) and survivor's pension) to be valued should generally include revaluation to the guarantee date.
When calculating cash equivalents for divorce purposes, see the Pension Sharing on Divorce guidance for further details of the benefits to be allowed for.
Following the requirement to equalise GMPs, the calculation methodology does not contain a GMP adjustment for members reaching State Pension age after 6 April 2016.
Any current cases where a CETV is required for a member reaching State Pension age before 6 April 2016 should be referred to GAD.
For deferred members and active members entitled to deferred benefits from age 60/65, the transfer value should be calculated in accordance with the standard procedures for calculating CETVs.
For reference, the tables from the consolidated workbook for calculating CETVs are:
- Table 201 - for deferred benefits payable from age 60
- Table 202 - for deferred benefits payable from age 65
Table 201 factors should only be applied to benefits accrued in AFPS 75 before 6 April 2006.
Where the benefits have not yet come into payment, the amount quoted is the statutory CETV.
AFPS05 Members who retired on Tier 1 ill health benefits should be treated as deferred members as they are not provided with pension benefits until age 65.
AFPS05 members in receipt of EDP payments are treated as deferred members as EDP payments are not considered to be pension benefits.
The cash equivalent for either an active not entitled to immediate benefits or a deferred member should be calculated as follows:
CETV = (MP x Fp) + (LS x Fls) + (SUR x Fsur)
Where
MP = member's deferred pension
LS = member's lump sum
SUR = pension payable on the death of the member to their spouse or partner
Fp = factor for member's pension - Tables 201 or 202 from the consolidated workbook
Fls = factor for member's lump sum - Tables 201 or 202 from the consolidated workbook
Fsur = factor for survivor's pension - Tables 201 or 202 from the consolidated workbook
Members with an existing pension debit
The transfer value should be calculated in two stages. Firstly the transfer value should be calculated ignoring the pension debit. Secondly, the value of the pension debit should be calculated as the transfer value of a deferred pension of the same amount as the debit. The CETV is the gross transfer value less the value of the pension debit.
