The calculations set out in this guidance are used to calculate the pensionable earnings to be credited to a member should they wish to bring a transfer value into the NHSPSS 2015 from a scheme which does not participate in the Public Sector Transfer club.
The credit awarded on transfer in is to be expressed as an earnings credit. The credit is generally applied in the year in which the member joins. However if the transfer is received more than 12 months after the date of joining scheme, the credit should be applied in the year of receipt (but subject to Determination of earnings credits). This credit is then treated similarly to other earnings received in the year it is credited for the purposes of determining benefits due at a later date.
The credit is subject to indexation in accordance with the in-service revaluation provisions (i.e. in line with CPI + 1.5% pa) whilst the member remains in active membership. After leaving the pension is indexed in line with other benefits i.e. in accordance with the PI Acts.
For the purposes of Annual Allowance calculations, it may be necessary to record the earnings credit provided due to an incoming transfer separately to other pensionable pay in any particular year.
Members are subject to certain restrictions on bringing a transfer value into the scheme which are defined in the scheme regulations.
In general, other than in certain special circumstances, members wishing to bring a transfer value into the Scheme must apply within 12 months of joining the Scheme and before the member reaches their Normal Pension Age (NPA).
If a transfer payment relates to any rights accrued in a contracted out scheme before 6 April 1997 a check must be carried out to ensure that any transfer value is adequate to cover the GMP being transferred.
As noted in the introduction, no adjustment to the earnings credit is required for GMP for members reaching State Pension Age after 6 April 2016. However, the adequacy check must still be carried out where members are transferring in GMP.
The test to be applied is as set out below.
| Transfer Value is equal to or greater than: Annual amount of GMP revalued up to the calculation date x appropriate factor |
The appropriate factor should be taken from the 2015_GMP coverage test table x-218 in the consolidated factors workbook, with a factor selected based on the member's age next birthday at calculation date (complete years).
If this test is not satisfied, the transfer cannot be accepted by the NHSPSS 2015.
