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Transfer of Service and the Public Sector Transfer Network (PSTN)

Published on Jan. 9, 2023

Last update on March 13, 2024

Table of contents

Introduction

A mechanism to allow the transfer of pensionable service from one pre-existing public service pension scheme to another was introduced in 1963. Subject to the criteria set out in the transfer scheme rules, an eligible pre-existing public service pension scheme member may transfer their pensionable service accrued in the pension scheme of one public service employment into the pension scheme of a subsequent public service employment.

Background to the transfer scheme and PSTN

The transfer scheme has its origins in Section 4 of the Superannuation and Pensions Act 1963, which, in summary, provides for the transfer of pensionable service between the civil service and an “approved organisation”, and between the various approved organisations themselves. In order to participate in the transfer scheme, a body is required to be designated as an “approved organisation” by regulations made under section 4 of the 1963 Act. Collectively, these organisations make up what is known as the Public Sector Transfer Network (PSTN).

The rules governing transfer of service in pre-existing public service pension schemes are primarily set out in Department of Finance Letter to Personnel Officers 24 April 1979 - ‘Draft Transfer Scheme’ and Letter to Personnel Officers 30 January 1981 - ‘Transfer of Service for Superannuation Purposes’.

A current list of organisations participating in the PSTN is available to download here.

Conditions for transfer of service

In order to be eligible to transfer service, there are a number of conditions which must first be met. These are set out in detail in the transfer scheme rules. Some key principles include:

  • The service must be confirmed, and it must have been reckonable service for the purposes of the earlier organisation’s pension scheme (either at the time it was given or it subsequently became possible to reckon the service).
  • The individual should be serving in the public service (usually as a member of the scheme into which they wish to transfer the service).
  • All of the reckonable service in the earlier organisation must be transferred. The period of service cannot be split.
  • The transfer must either be without a break in service, or if there was a break and some or all of the intervening period was spent in the employment of another organisation, the individual must transfer reckonable service in both organisations.
  • Service must transfer in sequence, i.e. from Body A to Body B, from Body B to Body C etc.
  • A transfer of service is not permitted if a pension has already been paid in respect of the earlier service.
  • Where a person is eligible for a preserved benefit, any entitlement to those preserved benefits is forgone on transfer of service. Where a refund of contributions has been paid, that refund must be repaid with compound interest in order to reckon the service.
  • A transfer of service is not allowed where it would involve dual credit for the period of service in question.

Key features of the transfer scheme

Operative date

Under the terms of the transfer scheme, each member body will have an operative date for the purposes of processing their transfer of service cases. Bodies are obliged to honour transfers of service after the agreed operative date.

A transfer of service case is determined to be pre- or post-operative based on the individual’s date of leaving the first organisation (and not the date of the request to transfer their service).

Where a transfer of service occurs between participating bodies that have different operative dates, the later of the two dates will apply.

Crediting of reckonable service

Transferred service will be treated for pension purposes as if it were actually accrued in the second organisation’s pension scheme, and becomes subject to the rules of that pension scheme once transferred. The service credit given on transfer will be:

  • actual service, in the case of a standard accrual pension scheme, resulting in ‘year for year’ credit.
  • proportionately adjusted, in the case of transfers to or from a fast accrual scheme (known as ‘uniform accrual’).

System of contributions

Section 4 of the 1963 Act provided that an appropriate contribution may be made from the first organisation to the second organisation in respect of the transferred service, when payment of the pension benefit commences. The 1979 transfer scheme expanded on this to provide four possible contribution methods that bodies may apply under the PSTN. The contribution methods specify whether and how the earlier organisation will contribute towards the cost of the member’s pension benefits accrued while in the earlier employment. The four systems of contribution can be found in the PSTN List of Participants.

A body specifies their preferred method on joining the PSTN. Where a transfer occurs between two bodies whose contribution preferences differ, it is a matter for those bodies to agree which method will apply. The contribution method set for the first transfer applies on a reciprocal basis for all transfers between those bodies thereafter.

Transfers outside the PSTN

In general, service cannot be transferred to/from a body that is not a member of the PSTN. Other transfer arrangements include:

  • Local Government Transfer Network (LGTN): The LGTN allows for transfers between an approved scheme and local authorities, or bodies to which the Local Government Superannuation Scheme (LGSS) 1998 applies as if they were local authorities. The LGTN is managed by the Department of Housing, Local Government and Heritage.
  • Transfer Values:
    • Transfers out: A Transfer Value may be paid in respect of transfer of pension rights to certain EU institutions. Further information on EU transfers may be obtained from the Pension Policy Unit in the Department of Public Expenditure, NDP Delivery and Reform.
    • Transfers in: it may be possible to have a Transfer Value paid from the scheme of a non-Network body (for example, a private pension arrangement) to a public service pension scheme. In these instances, the Transfer Value will be valued using the relevant purchase of notional service tables and converted into ‘years of service’ in the receiving public service pension scheme. ‘Year for year’ credit does not usually result.

Joining the PSTN

Membership of the PSTN is voluntary and organisations must apply to join. Under the 1979 letter, bodies wishing to join the network must complete six questions contained within that letter which set out their terms of participation in the scheme. The body applying to be a member of the PSTN must also submit a copy of their pension scheme.

Provided the application is in order and a body deemed eligible to join the PSTN, an S.I. to designate the body as an ‘approved organisation’ will be prepared and made by the Minster for Public Expenditure, NDP Delivery and Reform in accordance with section 4 of the 1963 Act.

Supporting information

Further information on the rules of the transfer scheme is available in the circulars and letters below. Bodies with queries in relation to joining the PSTN may contact the Pension Policy Unit of the Department of Public Expenditure, NDP Delivery and Reform.

Scheme members who wish to enquire about their eligibility to transfer service should contact their local HR or pension administrator.

LPOs

Other supporting documents