Linking and Aggregation
Linking and Aggregation are options for anyone that is newly appointed by an RCPS employer, enrolled in Nuvos and already has a preserved RCPS pension. It is a means of joining both pension records together to create one reward.
Linking relates to preserved final salary benefits and Aggregation relates to preserved Nuvos benefits.
Preserved final salary benefits (Classic, Classic Plus and Premium) - Linking
In order to qualify for the linking option, the break in service must be less than 5 years, the member must not have left on redundancy terms, and the former pension must not be in pay, i.e. the pension benefits must be preserved (also known as deferred).
This linking option will mean that a service credit is applied to the later Nuvos membership and all benefits will then be payable, at the Nuvos pension age of 65.
The pension benefits derived from the service credit will retain the final salary link i.e. will be based on the Final Pensionable Pay on leaving Nuvos.
If a member is eligible for this option, JSS will write to the member with further information and any decision to link must be made within the first year of re-joining the Scheme.
Preserved Nuvos benefits - Aggregation
The default option is that the former preserved Nuvos benefits will be aggregated with later Nuvos membership. Within the first year of re-joining, however, members can elect for the aggregation not to apply. JSS will contact those members affected.
There are a number of things to consider when thinking about aggregating former Nuvos membership with later Nuvos membership these are detailed below:
- The value of former Nuvos benefits will generally be the same whether or not they are aggregated. This, however, may not be the case if the former membership contains a Club Transfer In. If it has a Club Transfer In, the pension related to this transfer retains its final salary link, therefore has the potential to be higher or lower.
- Upon re-joining Nuvos, members can only aggregate or transfer, it is not possible to do both. A transfer would relate to transferring in any non RCPS pensions.
- If memberships are not aggregated, and the member leaves with less than two years membership (and assuming no transfer in of other pension benefits), the options on leaving (with regard to the later membership) would be either a refund of employee contributions (less tax) or a transfer to another pension scheme.
- If memberships are linked, all of the Nuvos pension would be payable at the same time. If memberships are not linked, there is a degree of flexibility in that the separate pensions could be paid at different times.
- There could be an effect on ill health retirement from the RCPS employer. If memberships are linked, all of the pension (i.e. from both memberships) would be payable without any actuarial reduction. If memberships are not linked, then only the later membership would be payable on ill health terms. In order for the pension from the former membership to be paid, it could only be paid on an actuarially reduced basis.
If you have any questions regarding Linking or Aggregation please contact JSS.
© JSS 2018
Last updated: 12 Jun 2018