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For members of the Local Government Pension Scheme in England and Wales

What happens if…?

I am protected by the McCloud remedy and I transfer from one public service pension scheme to another?

I am protected by the McCloud remedy and I transfer from one public service pension scheme to another?

The McCloud remedy applies to all public service pension schemes. If you have already transferred protected benefits to the LGPS from another public service pension scheme, they will stay protected. This is the case even if the transfer happened before 1 October 2023, as long as you have not had a disqualifying gap.

When you take your pension, the underpin check will include the transferred in service. Applying the McCloud remedy when a member has had a transfer from another public service pension scheme will be very complicated. There will need to be an exchange of information between the two pension schemes and significant changes to pension administration software. This could take some time.

If you recently joined the LGPS, you can complete a pension transfer within a year of the date you joined. This includes pension benefits from another public service pension scheme that are protected by the McCloud remedy. The protection works very differently in the LGPS. In the other public service pension schemes, you can choose to take your protected benefits as a final salary or career average pension. If you transfer those benefits to the LGPS and you have not had a disqualifying gap, you will get a career average pension with underpin protection. If you transfer protected benefits to the LGPS after a disqualifying gap, you will get a career average pension with no protection.

Your pension fund will tell you more about how transferring would affect you. It is important that you think carefully before making your decision about a pension transfer.

If you transfer LGPS benefits protected by the underpin to another public service pension scheme, they will generally gain the protection offered by the new scheme. This means that you would no longer have underpin protection. Instead, you would have a choice between a career average pension and a final salary pension for the relevant benefits. Benefits in the LGPS are protected if they were built up in the remedy period – 1 April 2014 to 31 March 2022. In the other public service pension schemes, the remedy period started later on 1 April 2015, but ends on the same date – 31 March 2022.

If you transfer LGPS benefits protected by the underpin to another public service pension scheme after a disqualifying gap, you would lose the protection.

Your new pension administrator will send you information about your options and how your pension would be affected by the transfer. Make sure you read these details carefully before making a final decision about a transfer.

If you have already transferred LGPS benefits to another public service pension scheme, you will not lose out. Your previous LGPS pension fund will give the other scheme the information they need to operate the protection in their scheme. This will be a complicated process which may take some time.

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