Pension bulk transfers—beginners’ guide
Produced in partnership with Wyn Derbyshire of gunnercooke LLP
Pension bulk transfers—beginners’ guide

The following Pensions practice note produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Pension bulk transfers—beginners’ guide
  • Active members
  • Members' consent
  • Preservation requirements
  • Requirements of Reg 12 on and from 6 April 2018
  • DC to DC bulk transfers—simplification of bulk transfer requirements from 6 April 2018
  • The transfer payment
  • Tax issues
  • Discharge and indemnity
  • Documentation—transfer agreement
  • More...

This guide is primarily aimed at trainees, newly qualified lawyers and other persons who are new to or unfamiliar with pensions law.

THIS PRACTICE NOTE APPLIES TO TRUST-BASED OCCUPATIONAL PENSION SCHEMES

A bulk transfer is the transfer of a group of members from one pension scheme (the transferring scheme) to another (the receiving scheme). The transferring scheme will make a transfer payment to the receiving scheme, covering all of the transferring members. The transferring members will cease to be entitled to benefits in the transferring scheme and will become entitled to benefits under the receiving scheme.

This beginners’ guide provides an overview of the different types of bulk pension transfer which can occur.

For an introduction to individual pension transfers, see Practice Note: Individual pension transfers—beginners’ guide.

Active members

If active members are to be the subject of a bulk transfer, it will be necessary to consider the basis (if any) on which they will accrue benefits in the receiving scheme.

On a bulk transfer between defined benefit (DB) schemes, it is common for pensionable service to be treated as continuous. In other words, the receiving scheme will credit transferring active members not with an early leaver benefit, but with a period of pensionable service. In that way, benefits for pre-transfer pensionable service will continue to be linked to pensionable salary post-transfer.

Members' consent

A key decision for trustees and employers is whether

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