Members’ of Public sector pension schemes wishing to transfer to QROPS and to other UK registered schemes, are currently unable to request transfer value quotation following a Government decision to link final salary pensions to the Consumer Prices Index.
The Chancellor George Osborne announced in the emergency Budget that the indexation applied to public sector pensions would change from the Retail Prices Index to CPI. The implementation date has not yet been confirmed but it is anticipated that guidance should be published within then next few months.
Over time CPI is generally 0.5% lower than RPI mainly because it does not include housing costs. As such, the change is likely to reduce government pension liabilities but is likely to result in lower transfer values for members’.
Individuals in receipt of a guaranteed transfer value for public sector schemes, wishing to transfer to a QROPS, should act swiftly before the guarantee period expires.
Once Public Sector schemes have received guidance from Treasury on how to apply CPI we are expecting long delays while the schemes deal with the backlog of transfer value requests that have accumulated during the transfer embargo.
If you are a member of a public sector pension please do not hesitate to contact Global QROPS for further advice.
