Any point transferring INTO Defined Benefit Pension Scheme

[ElleDeeCB]

Hello folks

I left a job a few years ago and have a letter from the pension scheme saying that I can either have a refund of my pension contributions (not much, about £1.5k) or I can transfer it plus the employer contribution into another pension scheme (about £6.2k).

I’m not sure if there is any point transferring it into my current pension scheme which is a USS defined benefit scheme, as that is based on the years I have worked and average salary and will pay fixed amount based on that. So no point adding to a ‘pot’.

Would it be better if I just open a SIPP and transfer it there instead?

These aren’t huge sums so I don’t want to pay for financial advice. But if there’s a free service I can use that would be helpful if anyone can point me in the right direction.

I work part-time so I’m a lower tax rate payer.

Many thanks

You need to contact your USS scheme.

Firstly to find out whether they allow a transfer in (for some defined benefit schemes there's a time limit and you can only transfer in another pension within a certain time of starting the job).

Secondly, if you can transfer, what's do you get? There will be either extra years or an extra set amount (or with USS it might go ino the DC rather than DB portion of the pension). There is no cicumstance in which a transfer in would be allowed by a scheme, but without any mechanism for it giving you a larger pension.

Even in a defined benefit schemes, it is possible that you would benefit by buying added pension or added years, it depends on the rules of your particular scheme. You need to contact the scheme and ask them. After all, it would be a shame to lose the employer's contribution if you can benefit from it.

You need to get USS to tell you what it’s worth with them , it’ll buy additional pension or membership, and then compare that to your SIPP option.

The transfer in will buy a guaranteed amount of additional pension