Rules relating to Occupational Pensions

[Alan Race]

Can anybody clarify this area. My wife and I have full residency parent visas and would hope to move out to OZ early next year.
I've read that you have to transfer your occupational pension fund to an Australian Pension Provider, but what if you are already receiving your occupational pension from your old employer ie. its been consolidated and forms a contractual agreement between the company pension fund and yourself. My pension along with many others is based on length of service as well as contributions ( value of fund )
Must be someone out there who's in the same situation and already sorted this out, or is there an OZ gov web site explaining all.
No probs with the state pension my enquiries with the UK Dept Work and Pensions confirm that it can be paid in AUS$ to any OZ bank so that's easy.

Best regards to everybody..........Alan Race

[broadsman]

I'm here on a spouse visa (my wife is Australian) and we moved from the UK in February this year. I receive an occupational pension from my ex-employer in the UK, at present paid in sterling into my UK bank account. There is no obligation afaik to transfer your UK pension fund into an Australian fund although there are tax advantages and it has to be done within a certain time after your arrival here. No doubt one of the financial experts on the forum will advise on that.

It's the case with my occupational scheme that once you are actually in receipt of a pension from it you can't tranfer the fund anyway and I imagine the rule applies to other occupational schemes.

As for paying your occupational pension in dollars direct to your account here, it's worth checking whether your scheme has an arrangement to do that. Mine has one with Bank of Scotland and because they buy in bulk the exchange rates are better than you'd get normally, certainly much more than by drawing money via ATM and many UK banks won't allow international transfers via internet or phone banking.

If your monthly pension is above the dealing threshold of firms like Hifx or Ozforex or you can afford to accumulate it until it is, then you will probably get even better exchange rates.

[Liam]

it is possible to transfer occupational and personal pensions abroad to remove the risk of exchange rate fluctuations before you start taking a pension in the UK. Provided the overseas scheme that is to receive your transfer is registered with UK HMRC as a 'Qualifying Recognised Overseas Pension Scheme' ("QROPS"), then it may accept a transfer from a UK employer scheme or personal pension plan. There are a large number of these now in Australia to choose from.

To transfer any UK Pension Benefits to Australia, the following requirements must be met:
- Permanent departure from the UK with no intention of returning to work or retire;
- Employment or self-employment (includes self employed investor i.e anyone under 65) in Australia;
- Australian residency for tax purposes;
- No part of the UK Benefit commenced paying a pension; (this would seem to rule out you Alan)
- Payment directly from the UK scheme to a 'Qualifying Recognised Overseas Pension Scheme' ("QROPS") and aprroved by APRA in Australia

There is no UK tax penalty on transfers to QROPS schemes, though the QROPS is obliged to notify the UK HMRC of any payments it makes to someone who is either UK resident at the time it makes the payment, or has been UK resident in any of eh five years prior to the payment.
A list of QROPS can be found at
HM Revenue & Customs: Qualifying Recognised Overseas Pension Schemes (QROPS)

There is an Australian "tax penalty". Those who transfer existing benefits to an Australian super fund within six months of coming to Australia pay no tax. Once the six-month period has expired and the funds are transferred into an Australian super fund, tax is typically levied at 15 per cent on the growth component from the date the person left the UK to when the funds are brought into Australia. This can now be paid from your fund rather than from your personal savings.

Please note that this is meant as General advice and anyone considering doing so should seek local tax and financial planning advice on their personal circumstances.

So Alan to answer your specific question " Generally" (as I said you need personal advice ) you will not be allowed to move pension funds to which you no longer continue to make contributions and they have moved to Pension paument phase. Therefore if you no longer work you will be forced to follow the UK rules and purchase an annuity.

Hope this is of help.

Liam

[Alan Race]

Thankyou Broadsman for your very helpfull reply, best wishes to you in Victoria, regards Alan

[Alan Race]

Thanks Liam for a very concise reply...much clearer now very helpful and appreciated.
Best wishes Alan

[june coates]

Originally Posted by Alan Race

Can anybody clarify this area. My wife and I have full residency parent visas and would hope to move out to OZ early next year.
I've read that you have to transfer your occupational pension fund to an Australian Pension Provider, but what if you are already receiving your occupational pension from your old employer ie. its been consolidated and forms a contractual agreement between the company pension fund and yourself. My pension along with many others is based on length of service as well as contributions ( value of fund )
Must be someone out there who's in the same situation and already sorted this out, or is there an OZ gov web site explaining all.
No probs with the state pension my enquiries with the UK Dept Work and Pensions confirm that it can be paid in AUS$ to any OZ bank so that's easy.

Best regards to everybody..........Alan Race

hi alan,
i have a nhs.superan pension and i contacted them to ask about transfer to oz.apparently you can only do it if you are not yet claiming your pension the good side is that you still get the yearly rise,unlike the state pension.once you move your state pension to oz,it is frozen at the rate you transfer it and you dont get any yearly rises.i am still waiting to find out what the tax situation is,as the superan is taxed at source.i am going out to perth on 7th dec.on 12mth visa hoping my cp visa will be allocated by then,so will just go to bali to have it validated.i wont inform state pension untill my permanent visa is in the bag.you can still leave a british bank account open for your pension so no problems.
june

[Alan Race]

Hi June, thanks for your reply. I think its now clear that you dont have to transfer your pension once its being paid, which is good as mine is with a major multi-national company and I did'nt fancy having to transfer to some unknown provider in OZ. let alone the costs of doing so.
I've already gone down the tax position with UK sources of income. Once you get to OZ you need to get a tax file number from the revenue there and with this the UK revenue will allow all sources of income to be taken without the deduction of tax. The rationale being that you have had to advise the revenue in OZ of your income sources.
best wishes Alan