Deferred members of the HSCPS 2015 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 1 April 2015; transfers to defined-contribution schemes and overseas schemes are prohibited.

This guidance 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 scheme's regulations. Members with over three months' qualifying service would generally be entitled to take a CETV to another HMRC registered scheme. Members with less than 3 months of qualifying service would normally be entitled to a refund of contributions.

The following members do not have a right to a CETV:

• members in active service (unless they opt out of the Scheme and become deferred members),
• pensioners (in respect of the pension to which the member has become entitled),
• pension credit members (in respect of rights that are directly attributable to a pension credit).

A member with at least 2 years of qualifying service (or a previous transfer-in) is generally entitled to a CETV at any time before their NPA (payment must be made by NPA). A member with less than 2 years of qualifying service must exercise their right to take a CETV within 12 months of joining a new scheme (and they must join this new scheme within 12 months of leaving the HSCPS 2015).

For the purposes of this document, NPA is as defined in legislation and PNPA is as defined in the scheme's Regulations (minimum age 65).

The calculation date used to calculate a CETV is defined as the "guarantee date" in The Occupational Pensions Schemes (Transfer Values) Regulations (Northern Ireland) 1996. This date is relevant for the purposes of determining the period prior to PNPA at the guarantee date (taken as period between guarantee date and PNPA, rounded up to next complete year) and for applying revaluation (from date of leaving to guarantee date).

The HSCPS 2015 has six months from the guarantee date (or if earlier the date on which the member reaches NPA to pay the CETV. If payment is not made within six months then the CETV value should be paid in accordance with the scheme Regulations. Generally, the amount payable is determined as the greater of the CETV recalculated as at the actual payment date or as the original CETV at the guarantee date increased at 1% pa above the Bank of England base rate to the payment date.

The CETV should not be adjusted for market conditions.

The deferred benefits and survivor's pension to be valued should include revaluation to the guarantee date. The accrued benefits should be calculated at the last day of service, and then increased in line with Pensions Increase (Review) Orders (Northern Ireland).

When calculating cash equivalents for divorce purposes, the benefits to be valued for an active member of the HSCPS 2015 are those that would be calculated if the member had left service on the date of the calculation (as specified by the Court, where appropriate) - either deferred benefits or the payment of immediate benefits if the member is over NPA. For a member with less than two years' of qualifying service the benefits valued are the deferred benefits that would be calculated if there was not a two-year qualifying period for deferred benefits.

The factor for valuing the survivor's pension does not depend on whether or not the member has a partner (as at the guarantee date) who would qualify for a survivor's pension in the event of the member's subsequent death i.e. a CETV should include an allowance for the value of a survivor's pension in all cases.

Members liable to an Annual Allowance charge can make an election requiring the Scheme to pay the charge on their behalf and for this to be offset against their pension benefits (referred to as 'Scheme Pays'). If a member has previously elected for Scheme Pays they will have a negative DC balance alongside their Scheme benefits. This negative DC balance must be netted off against the CETV calculated. Please refer to the Scheme Pays guidance for more details.

Members may have chosen to contribute to an Early Retirement Reduction Buy-Out (ERRBO) agreement. The period during which the member contributes to an ERRBO agreement is known as the Buy-Out period. All benefits earned during a Buy-Out period will be subject to an effective "Reduced Retirement Age" (RRA). A member may have up to three different Buy-Out periods with different RRAs (as well as periods of service in respect of which no ERRBO applies.)

Where relevant, the calculations should be carried out by reference to the member's RRA at the guarantee date as applicable to each Buy-Out period and PNPA (minimum age 65) for any period to which no ERRBO applies. RRA is determined based on PNPA (at the guarantee date) less the period(s) of reduction secured by the agreement. Both PNPA and RRA determined in this manner may differ from PNPA and RRA used to determine the rate of ERRBO contributions payable by the member.

For the purpose of determining the applicable CETV factor, the member's PNPA or RRA for each Buy-out period (if applicable) should be used.

The generic formula for calculating CETVs is set out below:

CETV =

[Scheme pension (no ERRBO agreement) + AP (pro-rated)] x TV1A (based on PNPA)

+ Survivor's pension (no ERRBO agreement) + (contingent) AP (pro-rated)) x TV1B (based on PNPA)

+ (Main scheme pension (RRA(1)) x TV1A (based on RRA(1)) + (Survivor's pension (RRA(1)) x TV1B (based on RRA(1))

+ (Main scheme pension (RRA(2)) x TV1A (based on RRA(2)) + (Survivor's pension (RRA(2)) x TV1B (based on RRA(2))

+ (Main scheme pension (RRA(3)) x TV1A (based on RRA(3)) + (Survivor's pension (RRA(3)) x TV1B (based on RRA(3))

Note

AP (pro-rated) is pro-rated for any unpaid contributions as per scheme regulations. Where dependents benefits apply, (contingent) AP (pro-rated) is also pro-rated for any unpaid contributions.

Points to note in using factors:

• Scheme pension and survivor's pension (no ERRBO agreement) should include any transferred-in benefit (with the survivor proportion already applied). All pensions should be revalued to date of calculation.
• Factors TV1A and TV1B are unisex and should be taken from the table TV1 and depend on the period from the guarantee date to PNPA/RRA (as applicable), rounded up to the next whole number of years. (PNPA as defined in the scheme Regulations).
• "Pension" in the above formulae means benefits including revaluation to the guarantee date.
• Additional Pension should be pro-rated, to allow for unpaid contributions (if the member is paying by regular contributions), in accordance with guidance provided by GAD. If the member has purchased personal and dependant's pension, the purchased dependant's additional pension should be added into the Survivor's pension.
• The value of any money-purchase AVCs should be added to the CETV calculated above, if these are to be transferred.
• Any Scheme Pays balance, calculated as at the guarantee date, should be netted off against the CETV calculated above.

HSCPS 2015 is contracted out of the State Second Pension (until contracting out ceases in 2016). The value of any liabilities earned after 5 April 1997 in a contracted-out scheme must be separately identified on transfer to an occupational pension scheme. The value of these post 1997 rights (known as Section9(2B) rights) should be determined using the same method as specified for calculating the CETV value but based on benefits earned in respect of service after 5 April 1997 only.

Although practitioners are not contracted out (by virtue of being self-employed), it is possible they have transferred-in contracted-out rights.

Guidance prior to August 2019 included an adjustment to a CETV that related to any service prior to April 1997. This reflected that inflationary increases on the GMP, which are the responsibility of the State Scheme after GMP Payment Age beyond any fixed scheme increases. This adjustment was removed in 2019 for all members reaching state pension age on or after 6 April 2016 following the requirement to equalise GMPs (schemes now cover all inflationary increases to pensions in payment).

GMPs will arise only where the member has transferred benefits in from another contracted-out scheme in which he/she had pre-6 April 1997 pensionable service.

The calculation of a CETV (i.e. non-Club transfer value) is subject to an underpin if the member has transferred benefits in from another scheme. This would not apply for a Club transfer value. If an underpin bites the value of the underpin is payable instead of the CETV calculated as above.

The underpin is calculated using the following formula:

Underpin = Amount of transfer payment accepted by the HSCPS 2015

+ the member's own contributions to the HSCPS 2015.

Member contributions include those used to purchase added pension or made under ERRBO agreements.

If a pension debit member requests a CETV, the quotation given should be based on the member's benefits after applying the debit i.e. the CETV should be the difference between a CETV based on the unreduced benefits revalued to the guarantee date and the CETV based on the pension debit benefits revalued to the guarantee date. The pension credit awarded to the ex-spouse remains in the HSCPS 2015 after a member exercises his/her right to a statutory CETV.

Transfers from the HSC Pension Scheme 2015 to a Recognised Overseas Pension Scheme (QROPS) listed on HMRC's website, subject to various requirements set out in the Contracting-out (Transfer and Transfer Payments) Regulations (Northern Ireland) 1996 (SR1996/619) is no longer permitted.

The factors and guidance in this guidance are not appropriate for members who are entitled to immediate benefits with no actuarial reduction. For such cases, please refer to guidance on Pension sharing on Divorce.

If a member has accrued benefits in both the HSCPS and the HSCPS2015, a CETV should be calculated separately based on the benefit entitlements within each scheme and the results added together. Eligibility to transfers is dependent on the combined service in both schemes.