Notes to accompany Statement of Preserved Benefits
If you leave service prior to your Normal Retirement Date and have received a Statement of Preserved Benefits you will have to consider what to do with your accrued benefits within the Oxford Staff Pension Scheme (OSPS). This page describes the options open to you and highlights points that you should consider.
If your date of birth has not been verified (see statement) payment of your preserved benefits will not be released until this office has either seen your original birth certificate or a current passport.
To ensure that you receive a prompt payment of your preserved benefits (at age 65) it is vitally important that any changes to your address are notified in writing to this office.
If you have any questions after reading this page please do not hesitate to contact us at the Pensions Office, 23-38 Hythe Bridge Street, Oxford OX1 2ET or on the telephone number shown on the Statement.
Preserved Benefits
If you have been in OSPS for a period of two years or more, including any transferred-in service, you will qualify for a preserved pension and a preserved tax-free cash lump sum. If a transfer in has been accepted from a personal pension arrangement an automatic minimum period of qualifying service of 2 years is assumed.
Final Pensionable EarningsThis is usually the salary that you will have paid pension contributions on over the last twelve months of your pensionable service. It comprises your basic salary together with any other pensionable elements of contractual pay. OSPS also has the provision that any previous twelve-month period within the last five years of your employment can be used in your pension calculations if it produces a higher Final Pensionable Earnings figure. For part time employees the full time equivalent salary will be used in these calculations. Pensionable ServiceThis is the number of years and days that you have been a member of OSPS, or the appropriate fraction of full time service for part time employees, plus any service transferred in from a previous pension scheme and any extra service purchased by Additional Voluntary Contributions (AVCs). Annual PensionThe annual pension is calculated as: Final Pensionable Earnings x Pensionable Service/80 Prior to 6 April 1995 OSPS was contracted-in to SERPS. This means that those members prior to 6 April 1995 earned a SERPS pension during their membership from 6 April 1978 to 5 April 1995. To take account of this SERPS pension the target of 1/80th x Final Pensionable Earnings for each year of membership is reduced by a formula amount to reflect the SERPS pension. This is known as the State Pension Offset. Benefit Statements were issued in April 1995 to all those members who were affected by this offset. Tax-free Cash Lump SumThis is calculated as: Final Pensionable Earnings x 3/80th x Pensionable Service |
Benefits both in preservation and payment will be increased annually in line with the Retail Prices Index.
Your preserved benefits will normally be paid when you reach age 65. However, they can be claimed for early payment from age 50 onwards (age 55 from 6 April 2010 for members joining after 5 April 2006). The payments would then be actuarially reduced to reflect their early release. You will be able to use some or all of your pension to buy additional lump sum and vice versa.
If you wish to can claim your preserved benefits after age 65, you must apply in writing to the Trustees through the Pensions Office before you reach age 65. If your do this, your preserved benefits will be enhanced to reflect their late release.
Payment of your preserved benefits can also be released early due to permanent ill health. Such an application will need to be made to the Managing Trustees of OSPS with the appropriate medical evidence.
Death Benefits
If you die before receiving your preserved benefits a lump sum equal to the current value of your preserved lump sum (as at the date of death) will be available for payment. You are advised to complete an Expression of Wish form in order to indicate to the Trustees of OSPS to whom you would wish payment of this lump sum to be made. However, the Trustees are not bound by any expression made by an individual.
There is also provision for a dependant's pension within OSPS equal to two-thirds of the value of your preserved pension at the date of death. The amount of pension payable may be reduced if your dependant is more than 15 years younger than yourself. Under the rules of OSPS a dependant's pensions is payable automatically to a legally married spouse or a registered civil partner. Subject to trustees' discretion, a financially interdependent partner in a relationship equivalent to marriage or other adults financially dependent upon you may be entitled to a dependant's pension.
There is also provision within the rules of OSPS to provide a pension for a maximum of two children upon death of a former member. Children are eligible to receive a pension if at the date of death they are under the age of 17. Subject to trustees' discretion, children aged between 17 and 23 but continuing in full time education or children suffering from some mental or physical disability rendering them unable to support themselves financially (irrespective of age) may also be eligible.
Transfer of Accrued Pension Rights
A transfer can be made to either a future occupational pension scheme or to an Inland Revenue approved personal pension arrangement. A transfer from OSPS can be processed at any time from the last day of pensionable employment up to your 65th birthday. You should check with your new scheme's administrators regarding their rules for transfers as there may be no obligation upon them to accept a transfer.
Your new scheme administrator will require your written authorisation to contact this office on your behalf to obtain the current cash equivalent transfer value of your accrued pension benefits. This transfer value represents the current market level of your benefits and as such may fluctuate in value accordingly.
If your new pension scheme is a member of the Public Sector Transfer Club the cash equivalent transfer value will be calculated in accordance with the Club rules up to your 65th birthday. This means that you should obtain equivalent benefits in the new scheme. Please note that as many Club schemes require you to apply for a transfer value within one year of joining the scheme you should contact your new scheme's administrators as soon as possible if you are interested in investigating a transfer.
If your new scheme is willing to accept a transfer they will send you an illustration of the additional benefits that the transfer value would secure for you in their scheme. It is highly recommended that independent financial advice be sought prior to making any decision with regard to transferring your accrued pension benefits. An Independent Financial Adviser will be able to help you in assessing whether there are any commission deductions, or administration charges due to the receiving scheme on completion of the transfer.
Important note
The Trust Deed and Rules which govern OSPS shall always be applied in questions of legal interpretation regarding the scheme and will override the information given on these notes, on the Statement of Preserved Benefits and in the scheme's explanatory booklet. A copy of the Trust Deed and Rules may be seen by arrangement with the Pensions Office.