This note is provided for Welsh Ministers as the responsibility authority for the Firefighters' Pension Schemes in Wales. This note relates to Club transfer values payable or receivable in accordance with the 2015 Scheme Regulations. The sections of this document cover the methods for assessing:
- Club Transfers out: Outgoing Club transfer values;
- Club Transfers in: The benefits to be provided in respect of incoming Club transfers; and
- Transfers to and from other fire authorities: The calculation of outgoing transfer values in relation to, and benefits to be provided in respect of, transfers between fire authorities.
The Welsh Ministers, as responsible authority under the Public Service Pension Act 2013 ('the responsible authority'), are required under the Firefighters' Pension Scheme (Wales) Regulations 2015 ('the 2015 Scheme Regulations') to issue actuarial guidance on the amount of club transfer values.
As part of this consultation the responsible authority has asked Government Actuary's Department (GAD), as scheme actuary, to recommend actuarial guidance in respect of the regulations detailed above. This guidance forms GAD's recommendation for the actuarial guidance required by these regulations.
The following changes have been made when reviewing this guidance:
- Important information around the expected audience for the guidance, use of the guidance, review of factors, compliance and limitations applies across all sets of guidance. Rather than being repeated in each set of guidance, this can now be found on the scheme home page. It is important to read this information alongside the guidance.
- Calculation methodology: No changes have been made to the calculation methodology.
- Examples: There are no examples in this guidance. Worked examples, using the calculation methodology, can be found in prior versions of the guidance (though please note that these use historic factors).
- Factor tables: The "Factor Tables" tab contains the names of the tables that are referenced in the calculation methodology. The tables of factors themselves can be found in the most recently published "Consolidated Factors Workbook" which is available by clicking the "Download current Consolidated Factors Workbook" button on the scheme's home page.
- Assumptions: The key assumptions underlying the factors in each note are contained in the Consolidated Factors Workbook.
- Regulations: The regulations that require the production of the actuarial factors and/or guidance that is the subject of this note are summarised in the "Regulations" tab.
Club transfers are calculated by reference to the guidance and tables provided by the Government Actuary for this purpose. This guidance should be used in combination with the approach set out in The Public Sector Transfer Club Memorandum by the Cabinet Office (referred to as the Club Memorandum).
The 2015 Scheme is a Career Average Revalued Earnings Scheme and so the "inner-Club" arrangements apply.
Except for the variations detailed in Club transfers out, Club transfers in, and Transfers to and from other fire authorities, Club transfers must comply with the Club Memorandum and any future changes to it. Scheme managers and administrators should ensure that they always refer to the latest version of the Club Memorandum and the latest factors in circulation.
"Cross border" refers to the transfer of benefits between two UK Fire 2015 Schemes: The UK Fire 2015 Schemes are the Firefighters' Pension Scheme (England) 2015, the Firefighters' Pension Scheme (Scotland) 2015, the Firefighters' Pension Scheme (Wales) 2015 and the Firefighters' Pension Scheme (Northern Ireland) 2015.
The formula used to calculate outgoing transfer values differs dependent on whether the member has requested a standard Club transfer or a cross border transfer. It would be best practice to determine which type of transfer the member wishes to consider before providing any calculation results, as this will ensure that the correct formula is used.
This guidance relates only to benefits accrued under the 2015 Scheme Regulations. Some firefighters may also have benefits under the Firefighters' Pension Scheme (1992) or the New Firefighters' Pension Scheme (2007) which should be dealt with separately in accordance with any relevant scheme guidance or the guidance set out in the Club Memorandum.
Furthermore, this guidance does not apply to transfer payments received from another Club scheme which relate to added pensions. Added pension is transferred on non-Club terms except in cross border cases (where it is transferred as per earned pension).
This document does not cover non-Club transfers or details relating to calculation and application of Cash Equivalent Transfer Values (CETVs) on divorce. Separate guidance notes contain details of these.
