neil248

A certain well known Australian bank actively offers to help get UK pensions over to Australia and into Super. We obviously expect to pay reasonable commission or fees for any services rendered as we are not inclined to do the process ourselves on the NHS fund at least. However the meeting with their financial planner left a very nasty taste in the mouth. She was very economical with any facts, quoted a $1000.00 fixed fee for "written advice" along with the commissions. It became clear that she was more interested in selling life insurance and possibly something more underhand regarding the Super transfer.

Does anyone on here know the pros and cons of transferring an NHS pension into Super.

As I understand it you can not put it into your existing Super but have to set up a new fund as the UK government require reports from the super company on that fund for 10 years.

Any comments are welcome.

Kiwipaul

Yes you can put it into your current super providing that super is QROPS approved. Their are sites in Oz that list those which are (cannot remember the location). Also your current super should be able to tell you also.

I've looked into this and it's quite straight forward to DIY. Biggest problem is getting the transfer value of the super on the date you arrived (for tax purposes as any gain in the transfer value is taxable in Oz).

"she" was very economical with the facts because she didn't want to disclose how straight forward it is IMHO.

On balance I decided to leave my pension in the UK as my OZ investments have done very poorly compared to my UK ones and it also spreads the risk.

The down side to leaving it in the UK is that its taxed as income when I start receiving it in Oz but as my tax free limit now is $18,000 I don't think that will be a problem if most of my OZ investments are in super (Tax free on receipt).

neil248

This is where it gets confusing. The Australian Super website states that pension accounts transfered from the UK can not be combined with other Australian Super accounts because of the reporting issues for 10 years to UK government.

Australian Super do seem to offer help for no fee and it does seem fairly simple to do.

With my wifes NHS pension do we trust the UK government to be doing the "right" thing in 20years or trust it to an Australian Super fund who may have all the excuses in the world if they don't actually perform over the longer term.

I do wonder how long it will be before scandals start to appear regarding some Super Funds unless they are actually regulated strictly.

Kiwipaul

This appears to be an admin issue with Australian super take their free advise what have you got to loose. No idea if you will have the same problem with other Super companies but having a second super fund does spread your risk in Oz, so not altogether a bad thing.

Putting all your super eggs one basket is not the most sensible thing to do just to save on admin fees. MTAA super crashed 30% just after I'd transferred my Oz super to them in 2007 and I'm still down 20%.

I now have a second sup with Australian Super to spread my risk.

neil248

I agree, two Super funds does actualy seem attractive for the reasons you state.

I was even happy to possibly go with the so called "advisers" banks own Super fund until I researched their performance and it's quite shocking to find a major bank have among the poorest performing Super Funds over the last 7 years if not the worst.

I was actually quite upset as we could easily have signed up with these people at the initial interview.

neil248

A little knowledge is always dangerous but!

Have been doing a little research and one article states that if the highly paid super fund managers had simply hidden your money under their desk it would be worth more than it is now with their efforts in the financial markets.

I did wonder why the woman kept on about the tax advantages rather than fund performance although the little graph she drew reminded me of the financial adviser in the UK selling me the endowment policy for my mortgage ( mortgage paid off and loads a money left over to spend on holidays) and we all know what happened there.

On a global scale Australian funds have performed relatively poorly through the recent troubles given the countries strengths because Australian Mum and Dad investors apparently have the risk tolerance of a sky diver!

abi31

The NHS pension is one of the best, most valuable pension structures in the country. I for one would batter an innocent bystander with a handbag to get to a pension scheme that good.

I suppose the government could theoretically change this - but as it stands changes to pensions cannot be made for the worse retroactively. So if they change the basis it wont affect someone who's left or any benefits accrued up to the date of change. For example, the recent change to revaluation from RPI to CPI is only applicable to benefits accrued after 06/04/2009.

You can also check the HMRC website for the list of existing QROPS.

http://www.hmrc.gov.uk/pensionschemes/qrops.pdf

Margaret3

[QUOTE=abi31;10098330]The NHS pension is one of the best, most valuable pension structures in the country. I for one would batter an innocent bystander with a handbag to get to a pension scheme that good.


I have frequent discussions with a British nurse whom i work beside in oz about the nhs pension (I paid into it for 20 years and have left it there,), I have been here over 5 years now. I have no financial knowledge, but just thought i trust the uk govt to do the better thing than the oz govt), However she swears blind its better to get it over here and get it working for me I would like to go back to the uk and work for a further 5 years to get the full benefit, but that doesnt look as if its on the cards (probably wouldnt get a job anyway as am 48).

I almost didnt read this thread, through fear that i have done the wrong thing.

As I said I know nothing of financial things and am just hoping my gut instinct will pay off

abi31

[QUOTE=Margaret3;10098651

I have frequent discussions with a British nurse whom i work beside in oz about the nhs pension (I paid into it for 20 years and have left it there,), I have been here over 5 years now. I have no financial knowledge, but just thought i trust the uk govt to do the better thing than the oz govt), However she swears blind its better to get it over here and get it working for me

[/QUOTE]

I'm not a financial adviser though I worked in the industry for 14 years but I'd wonder what your friend's basis for that advice is -maybe she's been lucky with her funds? Yes, if a person has a long time till retirement being in a money purchase (Super) environment could be a good thing - over the long term being invested in the stock market can bring high rewards to those who know how to play them, but with only 10 or so years to retirement and a long period of service with them it could be hard to match the guaranteed benefits provided by the NHS scheme - though the specifics of which is the best option is one for the qualified/regulated advisers.

To give an idea I bet it's possible to google for pension factors. I've found a government site that indicates that the life expectancy for a woman at 65 is 21.62 years. So divide a current transfer value by that to see what it could provide you in Oz (obviously doesn't take into account tax on transferring etc, some pension providers probably use bigger factors than that to build a profit in for themselves and other costs, but would give an idea). For eg if a TV is worth $100k that would be a pension of $4625 pa - is that smaller or bigger than the NHS pension (revalued to retirement age).

http://www.fahcsia.gov.au/guides_act...-4.9.5.47.html

It's complicated and I don't envy anyone deciding which risk to take.