Deferred pensions

A deferred pension is one that becomes payable in the future (typically at normal retirement age) and to which the employee has ceased to contribute as he/she has either opted out of the scheme or left the service of the scheme.

How are deferred benefits calculated?

The calculation of your deferred benefits is based on your period of membership and your final pay. For service accrued prior to 1 April 2014 your period of membership is generally the number of years you have contributed to the scheme (adjusted for part-time employees), plus any periods purchased with additional contributions and any credited to you from previous membership of another pension scheme or arrangement. Your final pay is generally the earnings on which you paid contributions in your last 12 months of membership or the better of the two previous years if this gives a higher figure. For your service from 1 April 2014, every year whilst you were a contributing member you will have received a pension that is equal to a 49th of your pensionable pay added into your pension account plus inflation increases.

Will my deferred pension be increased?

Yes, your deferred pension will be increased when you leave the scheme to the date you retire by the annual rate of inflation. After retirement, your pension will be increased in the same way as for other pensioners. We write to all of our deferred members annually to inform them of the increase to their benefit.

What happens if I re-join the scheme at a later date?

If you re-join the scheme, you will begin to build up accrued pension towards a new set of pension benefits, in addition to your deferred benefits. You will usually have the option of keeping these two sets of benefits separate or joining them together to form just one set of benefits. You normally only have 12 months from the date you join to choose to keep your deferred membership separate from your new pension account, so you should find out about this as soon as possible.

Can I transfer my benefits to another pension scheme?

This may be possible but you must first ask your current scheme's administrators if they will accept a transfer value. Some schemes will only accept transfers if the member requests a transfer within 12 months of joining. You may also transfer your pension to a personal pension or stakeholder pension. 

If you are interested in transferring the value of your accrued pension rights you can ask for a transfer value quotation to be provided (known as the 'cash equivalent' transfer value).

A quotation will be issued to you or the new scheme once we have all the relevant documentation to provide a quotation. The quote will be guaranteed for a period of three months from the date on which it was calculated (the 'Guarantee Date'). A written option to proceed with the guaranteed transfer value must be received within the three month guarantee period in order for the original transfer value to stand

When can my deferred pension be paid?

Your deferred pension will normally be paid at normal pension age which is linked to your state pension age for benefits built up from April 2014 (but with a minimum of age 65). Benefits paid before normal pension age may be subject to an actuarial % reduction.

I'm getting divorced or my civil partnership is being legally ended. What do I need to do?

Contact the Pension Team who will provide a cash equivalent transfer value quotation and all necessary documentation and information that will be required by your solicitors.