Transfer of UK civil service pension

[Cheery Thistle]

This is a bit complex…..I will be leaving my civil service post after completing a fixed term contract with 2 years service. This means I am not entitled to a CS pension (I think) as their cut off is 2 years. 
 

From what I read online it’s more or less impossible to transfer my CS pension out to an Aus super fund, am I right? Related to QROPS rules?
 

Is there any way I can transfer my CETV without losing the employer contributions? Only other option is to take a refund of my own contributions (which is annoying to say the least). 
 

Also can you set up an Aus super fund without having a job? Or is it all employer based? 

[Marisawright]

9 minutes ago, Cheery Thistle said:

Also can you set up an Aus super fund without having a job? Or is it all employer based? 

I can't help with the UK end but yes, you can set up an Aus super fund before you have a job.  In fact it's a good idea to do so, because you don't want to be stuck with your employer's choice of fund.  You want to do your own research and choose the fund you want, then you tell your employer which one to pay your super into. 

Note that there are 'retail funds' (set up by banks and investment companies) and there are "industry funds" (set up by trade unions for each industry, but open to anyone).  Generally, the retail funds have higher fees but they'll claim they have more expertise than the industry funds and therefore should perform better (which isn't necessarily true).  The industry funds claim their performance is just as good and they make a feature of keeping their fees low. 

https://www.ratecity.com.au/superannuation/articles/industry-vs-retail-super-funds

https://www.ato.gov.au/single-page-applications/yoursuper-comparison-tool

https://www.barefootinvestor.com/hostplus

[Marisawright]

I should add that you can also set up a Self-managed Super Fund (SMSF) which is a private superannuation fund that you run just for you (or you and your partner).  It's not something I'd recommend until you're 200% sure you're going to retire in Australia, because they're an absolute bear to wind up if you decide to leave (you can't be a trustee of a SMSF if you're living overseas). 

[rammygirl]

You can definitely set up a super fund here without ever having paid employment. I did this and bump started it with contributions from taxed funds as a form of investment that I can take tax free later. You can also put earned income in over and above your employer contributions up to a cap. 
 

 

[Ausvisitor]

14 hours ago, rammygirl said:

You can definitely set up a super fund here without ever having paid employment. I did this and bump started it with contributions from taxed funds as a form of investment that I can take tax free later. You can also put earned income in over and above your employer contributions up to a cap. 
 

 

The cap next year is 30k.

Because super contributions are taxed on entry (not exit like they are in UK pensions) it generally isn't smart to go over the 30k if it's out of your own income as there are better investments to put fully taxed personal income into.

[rammygirl]

2 hours ago, Ausvisitor said:

The cap next year is 30k.

Because super contributions are taxed on entry (not exit like they are in UK pensions) it generally isn't smart to go over the 30k if it's out of your own income as there are better investments to put fully taxed personal income into.

Yes and I have a variety but the gains are taxed so super is a good alternative investment for me as I didn’t have one at all. After tax contributions are not taxed on entry or exit if you don’t overdo it or take it too early. 

[Ken]

21 hours ago, Cheery Thistle said:

This is a bit complex…..I will be leaving my civil service post after completing a fixed term contract with 2 years service. This means I am not entitled to a CS pension (I think) as their cut off is 2 years. 
 

From what I read online it’s more or less impossible to transfer my CS pension out to an Aus super fund, am I right? Related to QROPS rules?
 

Is there any way I can transfer my CETV without losing the employer contributions? Only other option is to take a refund of my own contributions (which is annoying to say the least). 
 

Also can you set up an Aus super fund without having a job? Or is it all employer based? 

Is your CS Pension a defined contribution or a defined benefit? If the later, it's probably a bad idea to transfer it. Take it as a pension when you retire. Yes, it'll be taxed but do you expect to have a huge income when you retire? If not, there won't be much tax to pay.

[Cheery Thistle]

On 25/05/2024 at 09:31, Ken said:

Is your CS Pension a defined contribution or a defined benefit? If the later, it's probably a bad idea to transfer it. Take it as a pension when you retire. Yes, it'll be taxed but do you expect to have a huge income when you retire? If not, there won't be much tax to pay.

It’s defined benefit. 
That’s the thing - I’m not sure I’m even entitled to a preserved pension (ie leaving it where it is until I retire). I’m waiting to hear back from them. 
Worst case scenario is that I have to take a refund (less tax) of my contributions. 
Best case at this point is leaving it where it is. 

[Jon the Hat]

Some Government DB schemes are not funded, and therefore there is not a balance as such, and therefore nothing to transfer.  You would need to check if yours is one of those.

Edited May 28 by Jon the Hat