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CONTACT INFORMATION
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WestWest Midlands Pension FundPension Midlands
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Fund
Transferring Your Pension Rights to a Personal Plan or Section 32 Buy-Out Bond
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August 2012
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ARE YOU THINKING OF TRANSFERRING YOUR DEFERRED BENEFITS? You may, subject to certain conditions, transfer the cash equivalent of your Local Government Pension Scheme (LGPS) pension rights to an approved personal pension plan (offered by insurance companies, building societies, banks and other financial institutions) or to a section 32 buy-out bond (offered by insurance companies).
A sales representative must have a strong reason before recommending that you should transfer your LGPS pension rights to a personal pension plan or a section 32 buy-out bond. You should be aware that the pensions industry is a highly competitive market and the main priority for most insurance companies, banks etc, is to sell you one of their products. Therefore, we strongly recommend that you seek impartial and independent financial advice before going ahead with this type of transfer. Most financial advisers/sales representatives earn commission for the pension products they sell. Any commission payable is offset against your plan (ie, you pay for it). You will also pay for administration costs, policy fees and other expenses charged by insurance companies, banks, building societies, etc.
The costs of administering the LGPS are met by employers. The money you put into these plans is often invested in the stock market, so the value of your investment can go down as well as up. The amount of pension payable from these plans cannot be determined until the day you retire, and that will be of little use to you if the stock market crashes on the same day. There are no guarantees. Quotations projecting the benefits from a personal pension plan or section 32 buy-out bond can be very misleading. These projections can be very large indeed, but the rates of interest assumed in the quotation are not guaranteed. They are example rates of return laid down in agreement with wide rules.
2 WEST MIDLANDS PENSION FUND TRANSFERRING YOUR PENSION RIGHTS TO A PERSONAL PLAN OR SECTION 32 BUY-OUT BOND August 2012
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Even if the company has a good track record, this should not be taken as a guarantee that future returns will be as good. When comparing the benefits quoted against LGPS benefits, remember that LGPS deferred benefits are fully index-linked both before and after they have been brought into payment. The LGPS provides a wide range of benefits (pension and tax-free cash lump-sum, death benefits, spouse’s and children’s pensions, early retirement provisions, etc) and you should make sure that your financial adviser is aware of this.
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You will have no right of redress on the Fund or your former employer if your personal pension plan or section 32 buy-out bond does not match expectations. TRANSFER INFORMATION If you require any further information about transferring your LGPS benefits, contact Customer Services on 0300 111 1665. KEEP IN TOUCH Don’t forget to keep all your pension providers up to date with any change in your home address.
WEST MIDLANDS PENSION FUND 3 TRANSFERRING YOUR PENSION RIGHTS TO A PERSONAL PLAN OR SECTION 32 BUY-OUT BOND August 2012
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CONTACT INFORMATION Email us on:
Write to us at:
pensionfundenquiries@ wolverhampton.gov.uk
West Midlands Pension Fund PO Box 3948 Wolverhampton WV1 1XP
Telephone Customer Services on:
0300 111 1665 Visit our website at:
wmpfonline.com Fax us on:
0845 230 1565
Send us a text on:
Text WMPF + your message to 60066 Standard short code network charges apply
Minicom/Typetalk:
Lines are open during the following times: 8:30am to 5.00pm Monday -Thursday 8:30am to 4.30pm Friday
01902 554607
Calls may be monitored for training purposes
The LGPS is currently undergoing consultation on a new-look Scheme from 1 April 2014. For more details of how the new LGPS will work from that date and to find out how you can comment on the proposals, see the Fund’s website. This booklet is not intended to be a definitive analysis of the LGPS, nor is it specific to the circumstances of any particular member, their dependants or an employer. The information contained is not intented to constitute advice and should not be considered a substitute for specific advice related to individual circumstances. No liability is accepted for any errors of fact or opinion expressed.
Data Protection To protect any personal information held on computer, West Midlands Pension Fund is registered under the Data Protection Act 1998. This allows members to check that their details held are accurate. The Fund may, if it chooses, pass certain details to a third party, if the third party is carrying out an administrative function of the Fund, for example, the Fund’s AVC provider. Members who wish to apply to access their data on Data Protection Act grounds should contact the Fund’s Data Protection Officer on (01902) 554498 or via email (data.protection@wolverhampton.gov.uk). This authority is under a duty to protect the public funds it administers, and to this end may use information for the prevention and detection of fraud. It may also share this information with other bodies administering public funds solely for these purposes. The Audit Commission appoints an auditor to audit our accounts. It is also responsible for carrying out data matching exercises. The Audit Commission currently requires the authority to participate in a data matching exercise to assist in the prevention and detection of fraud. For more information, see www.wolverhampton.gov.uk/council/corporate/ finance/corruption_fraud/nfi.htm 4 WEST MIDLANDS PENSION FUND TRANSFERRING YOUR PENSION RIGHTS TO A PERSONAL PLAN OR SECTION 32 BUY-OUT BOND August 2012
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Information produced by the Fund can be made available in several formats. If you have any special requirements or would like to speak face to face with a member of staff, please contact us. Please remember that special requirements may take a little longer than normal to organise, but you have our assurance that we will do our best to ensure you receive the information in the most appropriate and efficient manner possible.