Pension Advice!

[Phoenix16]

Hi! Very confused about pensions!! Hubby's transferred all his here into one pot and was a good move for him. I'm not sure what to do with mine, it's a final salary government pension, superannuation UK, 23 years paid in, should I leave it where it is as final salary pensions are a thing of the past or should I move it over to OZ, I'm under the impression that as I locked it in as final salary it stays that way but advice needed!!

[fifi69]

Jeez K. I know its something we all have to think about ....but chill, relax, switch off...it's Friday Hun.

 

I hope you get your answer Hun xxx

[Ridz84]

Hi Jessie123,

 

It all depends on your circumstances really - If you think that at some point you'll be moving back to the UK it may be better to leave it where it is.

As it's a Civil Service/Government Final Salary scheme then i'm pretty sure it'll be inflation proofed and subject to "Revaluation in Deferment" (ie specific annual growth rates that are outlined in the scheme booklet) and ""Increases in Payment" (once you retire it will continue to keep pace with inflation). As you have 23 years service, it's likely that you'll get a relatively good income in your retirement (as opposed to through a normal "Money Purchase" pension scheme, ie a personal pension).

 

However, if you intend to settle permanently in Australia, it may be worth looking at transferring the funds over to a QROPS Compliant Super (Qualified Recognised Overseas Pension Scheme), as the tax situation is generally less restrictive than UK rules.

 

One way to get an idea of what it's worth in "cash terms" is to ask the scheme for a "Cash Equivalent Transfer Value" (CETV) as this should give you both the expected annual income at your retirement date and also the actual monetary value on transfer. That's a basic outline, but there's obviously a lot more in depth rules and regulations depending on the value of the fund etc.

 

I've worked in Financial Services in the UK before emigrating and now I work in Australian FS, so if you need any help or info give me a shout and i'll see what I can do :-)

Edited November 4, 2013 by Ridz84
Spelling/Grammar

[Andrew from Vista Financial]

Hi! Very confused about pensions!! Hubby's transferred all his here into one pot and was a good move for him. I'm not sure what to do with mine, it's a final salary government pension, superannuation UK, 23 years paid in, should I leave it where it is as final salary pensions are a thing of the past or should I move it over to OZ, I'm under the impression that as I locked it in as final salary it stays that way but advice needed!!

 

 

Hi Jessie

 

As a deferred member your final salary (defined benefit) pension will essentially remain the way you have left it as the benefits are locked in for you to take at the schemes normal retirement date.

 

As a deferred member the annual benefits will increase with indexation commonly nowadays the consumer prices index (CPI) so will keep pace with the UK cost of living.

 

At retirement these benefits will be paid to you as pension payments and again will increase with the UK cost of living commonly now CPI.

 

This pension can remain this way if you wish.

 

Alternatively if you wish you can transfer the pension to Australia however you should explore (when you are ready) the merits of both options in detail including understanding what these benefits might look like throughout your retirement and the implications each situation might bring. If a transfer is going ahead it can be very complex and breaches could occur if not carried out correctly.

 

There is no definitive answer as trying to understand and map out what the future holds means making lots of assumptions however if the assumptions that you use are realistic/conservative and you have given thought about your retirement goals and objectives ie goal retirement age, target income in retirement etc it is possible to build comprehensive modelling data that should encapture the journey.

 

Using all of this information and having a good understanding of the differences in both systems as well as the advantgaes and disadvantges of leaving the pension or transferring should then put you in a position to make a fully informed decision as to where you believe your retirement pot is best placed for you and your family now and in retirement.

 

Please take a look at this thread I wrote as it may also assist http://www.pomsinoz.com/forum/financ...on-thread.html

 

However having said all of this.

 

My advice to any prospective or recently arrived UK migrant is not to stress about transferring a Pension, in my view it is more important to wait until you are settled and feel that it is your intention to remain in Australia before embarking on a Pension Transfer.

 

Once you are sure that you wish to remain should you then consider a Transfer and in my opinion at this point seek professional advice from an Adviser that works in this area regularly, is qualified to give retirement advice, understand both systems and will work with you not just in relation to transferring but in relation to helping YOU understand where the benefits might be best placed even if that means the outcome is to leave the pension in the UK (also expect to pay for this advice).

 

 

Hope this helps,

 

King regards

 

Andy