Transferring my pension

What to do if you're thinking about transferring your pension out of the Scheme.

Contents

There's a lot to consider before you decide whether to transfer your pension, so weigh up your options carefully.  Select the specific topics from the list below to read more.

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Things to think about before transferring out of the Scheme

There are a number of reasons you may consider transferring your DB pension out of the Scheme. And there's a lot to think about too...

Reasons for transferring could include:

  • To consolidate your pension savings into one place. This could be to a new employer’s scheme or to an alternative pension provider. You can normally do this at any time before you start taking your pension, as long as it's in line with your Section rules. 
  • To take your pension at a different time, or in a different way to that offered by the RPS DB Sections. For example you may choose to transfer to a DC arrangement so you can get a flexible income with drawdown or take it all as cash.

Whatever your reason, there is a lot to think about before deciding to transfer out of the Scheme. Please read all of the information on this page carefully and make sure you have everything you need to make an informed decision.

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Good to know

If you're paying into the Scheme, you may be able to transfer your pension in from other approved schemes, if your section of the Scheme allows transfers in. Similarly, if you have previously built up a pension in one section of the Scheme and are now a member of a different section, you may be able to transfer your pension from your previous section into your current one.

Find out more about transfers in on the transferring in and out page.

The risks of transferring your DB pension out of the Scheme

The main benefit of your DB pension is that it will pay you a regular income until you die, no matter how long you live. It may also pay a regular income to a surviving spouse or dependant after your death.

You could lose these benefits by transferring your pension out of the Scheme.

Read more about what you get as an RPS member on the benefits of my membership page.

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Choosing a new provider

When choosing a new pension/scheme provider it’s important you understand exactly what the transfer will provide, including how your money will be invested, what benefits you’ll get in comparison to the RPS and any costs or fees involved.

If you decide that transferring to a DC arrangement is right for you and you are interested in drawdown, the Trustee of the RPS has appointed Legal and General Investment Management (LGIM) to offer members access to a drawdown facility. You can also choose a different drawdown provider if you prefer.

Find out more about drawdown and how it works on the understanding drawdown page. 

Watch out for scams

Pension transfers are one of the main routes being used by pension scammers. 

Their tactics include:

  • contacting people out of the blue wanting to discuss their pension
  • offering ‘free pension reviews’
  • promising better returns on your savings
  • offering upfront cash or other incentives to transfer  
  • offering early access to your pension
  • incentives, such as cashback or gifts 

If you fall prey to these fraudsters, you could lose your entire pension savings and be asked to pay a large tax bill too. 

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Options for transferring your pension out of the Scheme

You can transfer your DB pension out of the Railways Pension Scheme (RPS) to:

  • a different defined benefit (DB) arrangement, or;
  • a defined contribution (DC) arrangement

This could be with another provider within the UK or with an overseas provider recognised by HMRC. 

The impact of Additional Voluntary Contributions (AVCs)

If you have Additional Voluntary Contributions (AVCs), you may have to transfer them at the same time as your DB pension. This will depend on the rules for your specific Section. You can find your Section rules in your myRPS account.

The Scheme offers two AVC arrangements: BRASS and AVC Extra. However, AVC Extra is not available to members of the Network Rail Section. Visit the saving more area of the website for further information about BRASS and AVC Extra. 

You can also transfer AVCs without transferring your DB benefits, as long as it’s in line with the rules for your specific RPS Section. If you want to transfer BRASS and AVC Extra separately, please see the separate Read as you Need guides to BRASS and AVC Extra.

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Transferring from DB to defined contribution (DC)

If you transfer from a DB scheme to a defined contribution (DC) arrangement:

  • you may lose the guaranteed income for life for you and your dependents in your current scheme  
  • you may see the value of your pension pot go down. It won't always necessarily go up. 
  • you may have less income in retirement, particularly if the value of your pension pot falls
  • you may have to pay management fees to your pension provider
  • you may run out of money in your lifetime

Because of these added risks and potential outcomes, you may be legally required to get independent financial advice if you are transferring from a DB to a DC arrangement. See the relevant details below. 

It’s also important that you understand all of the options available to you, and the possible implications, before you proceed. Please check the Read as You Need guides listed below. 

You can also find more information about your options in the defined benefit (DB) area of the website.

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Video: Is transferring right for you? 

Watch this short video to learn more about why switching to a DC pension might not offer you the best retirement outcome.

How to transfer your DB pension out of the Scheme

Please read and consider all available guidance before proceeding with a request to transfer your pension and seek financial advice where needed. You may have to get financial advice by law before a transfer can go ahead. See the importance of financial advice section.

If you decide to go ahead with a transfer, it is likely you will need a guaranteed transfer out quote, also known as a cash-equivalent transfer value (CETV).

We strongly recommend you get a transfer out estimate first. This will show you the forecasted value of your pension if you choose to transfer it elsewhere. You can get as many estimates as you need, completely free, by logging into your myRPS account and selecting 'request an estimate' under my pension. 

If you've already had an estimate, and are ready to progress to a guaranteed CETV, then the quickest and easiest way for most members to request one is online. Simply log in to your myRPS account and select 'request a transfer out quote (CETV)' from the my pension menu. If you're unable to request a CETV online, or experience any problems, you can still request a CETV by email or phone using the details on the get in touch page. 

If you are making AVCs you will need to stop them before we can provide a CETV. 

You can only get 1 CETV free in a 12 month period, anything more than that and you will be charged.

Your CETV is only valid for 3 months so it’s important that you return all of the necessary paperwork within that timeframe.  You should get the paperwork from the scheme administrator, Railpen, at the same time as you get your quote. 

Railpen will ask you to send documents or evidence about the scheme you want to transfer to. This is in line with regulations introduced by the government in November 2021, to help protect members where risks of possible scams are identified. Your transfer will not be refused on the basis it might not be in your best interest. However, Trustees can refuse transfers where there's a greater risk it may be part of a scam. 

Railpen may also refer you to the government approved advice service, MoneyHelper for guidance on your transfer.

You will only be able to transfer if you have already stopped paying into your DB pension, i.e. are a preserved member. Please speak to your employer directly if you want to stop paying in.

Railpen will do their best to complete your transfer as quickly as possible, but it may take up to 6 months for the money to be paid out. This is in line with regulations introduced by the government in November 2021, which aim to help protect you from unsuitable or insecure transfers. It gives Railpen time to carry out the necessary security checks and help protect your savings from scammers. 

Once complete, a transfer is permanent and cannot normally be reversed at a later date, so please think carefully before going ahead.

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Read as you Need Guide

You can find a step-by-step guide to transferring your pension in the transfer options Read as You Need guide for DB members. Download it below. 

The importance of getting financial advice before a transfer

It’s strongly recommended that you take financial advice if you want to transfer your pension.

In some situations, the law states you must take financial advice before your transfer can proceed. Check the Read as You Need guide to transfer options for details on when financial advice might be legally required.

Visit the guidance and advice page for details on where to get help and support.

If you’re aged 50 or over and have a DC pension pot such as BRASS and AVC Extra you can book a Pension Wise appointment for guidance on your options. Learn more about Pension Wise on the MoneyHelper website.  

Check the Financial Conduct Authority's guide to getting advice with a DB transfer.  

What to read next...

Guidance and advice

If you need help to understand your options, you can find guidance and advice to support you in making the best decision for your circumstances.

Watch out for pension scams

Make sure you know the warning signs of pension scams and how to avoid losing your savings. 

Read as You Need guides 

Detailed guides covering a wide range of pension topics, including transfers. You can read them online or download them as needed.