natashaandanaya Posted February 13, 2013 Share Posted February 13, 2013 Hi, my husband has a final salary pension, which he really is unhappy about leaving. At the moment it would stop, and he would need to top it up on arrival to aus. He thinks that if he stays in the same company (the pension isn't transferable), that they pay 12% into the superannuation and he thinks he will need to pay around a third of his salary into a pension to maintain the same level of income... do u have any idea, what he really needs to input into a new pension, he currently earns around 90k GBp and expects to earn around 220k aud... please can you give me some ideas to tempt him to leave his uk final salary pension? his current uk pension is non contributory... any help and ideas gratefully received natasha Quote Link to comment Share on other sites More sharing options...
Rupert Posted February 13, 2013 Share Posted February 13, 2013 Not really sure I understand your question, he will still get the final salary pension when he retires won't he? Just a less % of it? And the he would also get whatever he has in Australian super. How far off retirement is he? Final salary pensions are great and rare these days, not surprised he is keen to keep it. Quote Link to comment Share on other sites More sharing options...
dmjg Posted February 14, 2013 Share Posted February 14, 2013 I have mine still sitting in the uk. Sitting is really the wrong was of thinking of it. The taxpayer in the future will be paying when I am retired. Mine is a 1/80th scheme. I have done my calculations and will end up with £2,150 per year for life after 60. My wife will then get half that per year if I die, until she does. Therefore I plan to live as long as possible! Quote Link to comment Share on other sites More sharing options...
Andrew from Vista Financial Posted February 15, 2013 Share Posted February 15, 2013 Hi Natasha I did actually respond to your post on another thread previously http://www.pomsinoz.com/forum/money-finance/176374-pension-advice.html I would also direct you here as it is a thread I wrote on an overview of UK Pension Transfers to Australia http://www.pomsinoz.com/forum/pension-transfers-ask-vista/169401-uk-pension-transfers-information-thread.html. I would suggest that you see a Financial Adviser at some point going forward regarding the UK Pension and whether it might be better for you to leave it in the UK or transfer it Australia and also to look at some retirement planning projections. If he is leaving his UK company then he will become a deferred member of the Pension scheme (also referred to as frozen), this does not (as pointed out) mean he will lose it. He will still be entitled to the benefits in the form of an annual pension that he has accrued up to this point and these benefits will generally continue to increase each year with the cost of living. So for example if they were worth £10,000 now and he was able to take the pension in say 20 years time and the annual increase averaged 2.5% then in 20 years they would be worth around £16,386 a year, he may also have an opportunity to take a lump sum. $220,000 is a good salary and 12% Superannuation in addition to this is also very good, this will mean that if the Super is paid on top of salary that he will have around $26,400 gross annually paid in (this amount currently breaches the contributions caps but that's a different story). I would suggest that when you have been in Australia for a while and you feel that it is your intention to remain to then take advice from a reputable Adviser that has a good knowledge of both systems and can work with you to try and ascertain where you retirement benefits might be better off i.e either leave the final salary scheme in the UK and take the annual pension at retirement or transfer it to an Australian Superannuation Fund. Until then try not to worry too much as there is no rush to have to do anything. If and when you are ready we will be happy to assist you with Retirement Planning / UK Pension Transfer Advice. Kind regards Andy Quote Link to comment Share on other sites More sharing options...
Bobbsy Posted February 15, 2013 Share Posted February 15, 2013 Let me echo the advice to contact an independent financial adviser. A final salary pension is not to be scoffed at in this day and age--but exactly how valuable it is to keep going will depend on your age, how long you've been with the company, etc. I'm on a final salary pension and how much I received was based on my years of service paying into the pension. My case was complicated by leaving the company (due to a corporate buy out) and also the need to claim early retirement on health grounds. However, I can say that, in my case, leaving early didn't result in any penalties, just a reduction in benefit because I'd only worked there for about 23 years instead of 35 which was the maximum. From the numbers you mention, the combination of his accrued final salary scheme plus what he can build up with a lovely high salary in Aus might work quite well--but only somebody who can genuinely crunch the numbers can give a definitive answer. Quote Link to comment Share on other sites More sharing options...
The Fisheys Posted February 15, 2013 Share Posted February 15, 2013 They also have a transfer value, but, there is a limit to how much you can send to Oz without getting taxed, I think it is $175,000, per annum. From your salary, you clearly are not thick, so my advice is again, see a financial adviser, but, but, but, be your own expert and learn about your own money, as it means more to you than anyone else. annuity rates here are lower than the UK, but, big but, once you turn up your toes, your wife gets the full amount, and if she has gone first, then your kids get the full fund. ie it does not die with you..............big, big difference, end of the day it comes down to if you care what happens to your family once you are gone. No inheritance tax here either, and, with certain caveats, you can get your hands on your full pension fund, tax fee, at 60, so you could buy a house with it if you wanted. also, your residency status here is important, you need to be not a temporary resident to get your pension tax free, but, if you have realisable assets of $1,000,000 they are ok with that, and a pension fund counts. as I said, be your own expert, but also, Aussie pensions are paid tax free. do do the homework, every situation is different. all UK government pensions have a transfer value, and believe me they are very keen to get their liabilities "off books." good luck, and enjoy the results of your hard work here. Quote Link to comment Share on other sites More sharing options...
VERYSTORMY Posted February 15, 2013 Share Posted February 15, 2013 You need to think long and hard and research carefully the way Oz supper works. Personally I think it is the greatest con on the planet and the proposed legislation is supporting that view. Mine, after paying in a serious amount of money buys a round of drinks. There are some experts that specialize in this and I suggest you consult. Quote Link to comment Share on other sites More sharing options...
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