The Trustee has introduced an additional option for members who have not yet retired, called partial transfer.
Taking a partial transfer allows you to transfer part of your benefits out of the Plan to another provider. Unlike a full pension transfer, where all your Defined Benefit (DB) retirement benefits from the Plan would be moved into another pension arrangement, a partial transfer allows you to transfer part of the value of your benefits into a Defined Contribution (DC) scheme. The remainder would be left in the Plan and would provide you with a guaranteed income (a pension) at retirement, with the option to give up part of this pension to provide a tax-free cash lump sum.
By transferring to another (DC) arrangement (such as a company or personal pension, including a SIPP), you can potentially access more choice, including the option to buy a pension from an insurance company, take your full benefits as a cash lump sum or invest your pension savings and take cash sums from them as it suits you (income drawdown). These options may offer more flexibility but need to be carefully considered as you would be giving up the guarantees and death benefits the Plan provides.
You do, of course, continue to the have the option of transferring 100% of your benefits.
The Trustee’s current policy (which may change from time to time) is to allow partial transfers that meet the following conditions:
- You can take a partial transfer if you have a transfer value of more than £100,000.
- You can only take one partial transfer – if you decide to take a second transfer then you will need to transfer all of your remaining benefits.
- You must take between 25% and 75% of your transfer value.
- The benefits you leave in the Plan must be worth at least £50,000.