AESF exit options

[Neil B]

I'm quite knowledgale about the limited options for transferring a UK DC pension to Aus, and with only a small pot my options are even more limited. Determined to get out of UK, UFPLS is not an option due to >50% being AFE ~£50k, too small balance to consider SMSF, leaving AESF as the only reasonable option. However, before commiting to AESF I approached them regarding access to those funds in later years and they refuse to provide any information regarding exit options.

Currently about to turn 55 (hence starting the journey) and what I'd like to be able to do is consolidate AESF with existing Super once 60 years, and the 5/10 year UK tax liability has expired. AESF instructed to approach a financial advisor for info exiting their fund (!!!). Now, I've found myself relying on generosity for advice since to date I've been unable to pay anyone for advice due to AU regulatory restrictions and insufficient financial interest.

My question is, are there viable options to rollover from AESF to Super after 5 years of the original transfer? AustralianSuper would ideally be the receiving fund but have advised that is not possible for "any funds originating from the UK" regardless of how many years have passed. If necessary, a rollover out of AustralianSuper to another Super in order to consolidate I'll have to consider that too.

While here I have another AESF question: Does the UK pension aleady being crystallised (due to PCLS, yes I know I'll pay AU-MTR on it all as frontloaded AFE, I have my reasons) affect the AESF transfer option? Aviva UK were unable to advise their position on this also

I get that exiting any fund is not in their interests but being delibarately obstructive makes we more determined to leave, and ever more wary of handing money to AESF for the same reason despite being the only realistic option. Any advice you can offer will be greatly appreciated.

[Marisawright]

I'm not an expert but if Australian Super say they can't accept the transfer, then it's extremely likely that no other fund can either.  

If it's a small balance, why don't you just plan to take it as a lump sum when you reach preservation age instead?   Always assuming  AESF allows you to take your super as a lump sum (I notice all their literature talks about an income stream).  Have you checked their trust deed to see if they allow lump sums?

Edited September 10, 2023 by Marisawright

[Neil B]

6 minutes ago, Marisawright said:

I'm not an expert but if Australian Super say they can't accept the transfer, then it's extremely likely that no other fund can either.  

If it's a small balance, why don't you just plan to take it as a lump sum when you reach preservation age instead?   Always assuming  AESF allows you to take your super as a lump sum (I notice all their literature talks about an income stream).  Have you checked their trust deed to see if they allow lump sums?

Thanks @Marisawright. My best guess is AustralianSuper wish to avoid any risk of unauthorised payment among countless possible scenarios with UK sourced money hence take the much simpler route of not accepting any rollover regardless. I could be wrong  As you say maybe all Super take the same approach, maybe it's only flexi-access ones, or maybe they have to.

Sadly I'm not likely to be in a position to retire until 65+ and my long term expectations are not conducive with an income stream either, hence wishing to know AESF exit options and consolidation in flexi-access at the earliest opportunity.

[Marisawright]

1 hour ago, Neil B said:

Thanks @Marisawright. My best guess is AustralianSuper wish to avoid any risk of unauthorised payment among countless possible scenarios with UK sourced money hence take the much simpler route of not accepting any rollover regardless. I could be wrong  As you say maybe all Super take the same approach, maybe it's only flexi-access ones, or maybe they have to.

Sadly I'm not likely to be in a position to retire until 65+ and my long term expectations are not conducive with an income stream either, hence wishing to know AESF exit options and consolidation in flexi-access at the earliest opportunity.

One thing to note: once you reach preservation age, if you stop working you can make a declaration that you have retired, and claim your lump sum. Then if, once you have the money, you 'change your mind' and decide to return to work, there is no penalty for that. 

Edited September 10, 2023 by Marisawright

[Nemesis]

52 minutes ago, Marisawright said:

One thing to note: once you reach preservation age, if you stop working you can make a declaration that you have retired, and claim your lump sum. Then if, once you have the money, you 'change your mind' and decide to return to work, there is no penalty for that. 

They do usually ask for proof of "retirement" though - or at least proof of finishing work at that time.

i had to supply evidence that I had finished work on a specific date, and then QSuper contacted my employer to check there were no further payments coming in.

[Marisawright]

42 minutes ago, Nemesis said:

They do usually ask for proof of "retirement" though - or at least proof of finishing work at that time.

i had to supply evidence that I had finished work on a specific date, and then QSuper contacted my employer to check there were no further payments coming in.

Sure. It's not going to work if you just pretend to take a break and continue working for the same employer.

[Nemesis]

7 hours ago, Marisawright said:

Sure. It's not going to work if you just pretend to take a break and continue working for the same employer.

QSuper were a bit sneaky on that one, as when I first spoke to them they told me you "just tick a box to say you have retired". Ended up a bit more complicated than that and meant I only got the money a few days before flying home, as they wouldn't release it till my employers (Qld Govt) confirmed that they weren't sending any more payments. And I think they only confirmed that in the end cos I rang them every day for a fortnight and made a right pain of myself!

[Neil B]

@Marisawright , @Nemesis Thanks for the great tip and detail, good to know.

[Parley]

I think all Super funds are likely to be the same in that call centre staff are forbidden from giving you anything that can be construed as advice. They are not advisors and not licenced as such. They are restricted to giving you factual information only about the fund and your account.

If you want advice as to what to do they will refer you to a licenced advisor within their organisation or you can get it independently.

They are not trying to be unhelpful - it is the law they have to follow.

Edited September 10, 2023 by Parley

[Steve Elliott]

As a financial adviser of 30+ years, and given the information provided, I would suggest seeking out some financial advice from a specialist in the area of UK pension transfers. Given the modest balance, paying an agreed "fee for scaled advice" is possibly going to be your best option. AESF's reluctance to provide you the advice you are seeking, while frustrating, is correct. You need to obtain personal financial product advice which AESF can't provide. Also, they would potentially be conflicted. 

Bear in mind you can potentially rollover non QROPS into AESF where the funds would be segregated from UK sourced funds. 

Getting something like this wrong could potentially be very costly and there are many moving parts including fees, insurance, asset allocation and so forth. 

I would suggest having a conversation with Andrew Williams at Vista who can put you on the right track.

Good luck. 

 

[Neil B]

Thanks for the advice @Steve Elliott. I've learned enough to appreciate that not making the most cost effective choices can very quickly become very expensive.

My circumstances are extremely straight forward but without knowing the exit options from AESF it feels rather like throwing money into a black hole. I simply wish to know what options may be available to access that money again in future, not advice regarding which option may be the most beneficial for my circumstances. As @Marisawright mentioned AESF publicised documentation talks a lot about income stream. I've found no mention of do or don't permit other common withdrawal/exit .... flexi-access,  lump sum, rollover. Given the UK-AU DTA makes moving retirement funds extremely fraught the least AESF could and should do is make it much easier to understand what to expect from then on before commiting to their service. Of course there's no one size fits all strategy but at least publicising the potential options should surely be a regulatory requirement, not forcing everyone to engage a 3rd party advisor for the most basic of information. Believe it or not I have offered to pay advisors and been turned down. 

"Frustrating" is an understatement. Hopefully Andrew at Vista can help. Thanks again.

[Marisawright]

14 minutes ago, Neil B said:

My circumstances are extremely straight forward but without knowing the exit options from AESF it feels rather like throwing money into a black hole.

I wonder if you are asking AESF the wrong question?  You asked them if you can roll it over into another super fund.  The answer to that question involves them AND another super fund AND regulations about UK sourced funds, so they cannot advise on that. 

If you ask them whether you can withdraw a lump sum at preservation age, they will be able to give you a simple yes or no answer.   Same with whether you can convert it to an income stream (pension) managed by them.  Both those things are simple facts, dictated by the governance documents for their own fund.

Edited September 11, 2023 by Marisawright

[Andrew from Vista Financial]

On 10/09/2023 at 11:47, Neil B said:

I'm quite knowledgale about the limited options for transferring a UK DC pension to Aus, and with only a small pot my options are even more limited. Determined to get out of UK, UFPLS is not an option due to >50% being AFE ~£50k, too small balance to consider SMSF, leaving AESF as the only reasonable option. However, before commiting to AESF I approached them regarding access to those funds in later years and they refuse to provide any information regarding exit options.

Currently about to turn 55 (hence starting the journey) and what I'd like to be able to do is consolidate AESF with existing Super once 60 years, and the 5/10 year UK tax liability has expired. AESF instructed to approach a financial advisor for info exiting their fund (!!!). Now, I've found myself relying on generosity for advice since to date I've been unable to pay anyone for advice due to AU regulatory restrictions and insufficient financial interest.

My question is, are there viable options to rollover from AESF to Super after 5 years of the original transfer? AustralianSuper would ideally be the receiving fund but have advised that is not possible for "any funds originating from the UK" regardless of how many years have passed. If necessary, a rollover out of AustralianSuper to another Super in order to consolidate I'll have to consider that too.

While here I have another AESF question: Does the UK pension aleady being crystallised (due to PCLS, yes I know I'll pay AU-MTR on it all as frontloaded AFE, I have my reasons) affect the AESF transfer option? Aviva UK were unable to advise their position on this also

I get that exiting any fund is not in their interests but being delibarately obstructive makes we more determined to leave, and ever more wary of handing money to AESF for the same reason despite being the only realistic option. Any advice you can offer will be greatly appreciated.

Hi Neil

Some comments which may assist.

We have had no issues rolling QROPS to Non-QROPS Accounts for clients ever (no Non-QROPS Scheme have refused to accept the rollover), of course we have done this after the clients are clear of any unauthorised payment charge timeframe (5/10).

We use Industry/Not Profit Funds regularly, although I cannot think off the top of my head whether we have recently done this with AustralianSuper however I am unsure why they have said that to you (do you have that in writing from them or was that information provided by a call centre rep?), it's simply superannuation monies being received and they are not being asked to undertake any HMRC reporting.

In relation to transferring a UK Pension that has been crystallised, this is doable, typically the hurdles can be that once crystallised a subsequent transfer must be en bloc (in full)  AND it must be transferred to a scheme that has no other money (although seems not to be an issue with the size of pot you describe). 

Would be advisable to check with the UK Scheme that they are happy to still allow a transfer to a QROPS if PCLS is taken (we have not experienced any issues to date).

Other exit options are simply accessing the monies (regardless of the 5/10 year timeframe) when the relevant Australian retirement conditions of release are met via Transition to Retirement Pensions (albeit max 10% of balance each FY) or Account Based Pensions as these types of payments are not unauthorised. 

 

Regards Andy

Edited September 11, 2023 by Andrew from Vista Financial

[Neil B]

23 hours ago, Andrew from Vista Financial said:

Hi Neil

Some comments which may assist.

We have had no issues rolling QROPS to Non-QROPS Accounts for clients ever (no Non-QROPS Scheme have refused to accept the rollover), of course we have done this after the clients are clear of any unauthorised payment charge timeframe (5/10).

We use Industry/Not Profit Funds regularly, although I cannot think off the top of my head whether we have recently done this with AustralianSuper however I am unsure why they have said that to you (do you have that in writing from them or was that information provided by a call centre rep?), it's simply superannuation monies being received and they are not being asked to undertake any HMRC reporting.

In relation to transferring a UK Pension that has been crystallised, this is doable, typically the hurdles can be that once crystallised a subsequent transfer must be en bloc (in full)  AND it must be transferred to a scheme that has no other money (although seems not to be an issue with the size of pot you describe). 

Would be advisable to check with the UK Scheme that they are happy to still allow a transfer to a QROPS if PCLS is taken (we have not experienced any issues to date).

Other exit options are simply accessing the monies (regardless of the 5/10 year timeframe) when the relevant Australian retirement conditions of release are met via Transition to Retirement Pensions (albeit max 10% of balance each FY) or Account Based Pensions as these types of payments are not unauthorised. 

 

Regards Andy

Thanks heaps Andy, that is very helpful.

The call centre at AustralianSuper did anything but inspire confidence in this matter and I get the feeling whoever replied to my email failed to consider having mentioned the 5/10 year expiry. Given your comments it seems highly likely I'll have no trouble when the time comes to rollover from AESF.

I've asked Aviva UK the question regarding transferring crystallised to QROPS, being certain to word the question absolutely unambiguously this time. The first reply basically said no comment, ask the recipient! They do have internal financial advisors if necessary.

Thanks again.