Marie_m

Can anyone help or give some advice??
My partner has a local government pension that he has being paying into for 12 years and a couple of other pensions that were only paid for a couple of years each. Well our predicament is.... someone at the Aus expo told us that if he frooze the pension in the UK he would have to pay additional tax in Aus can anyone explain this??
Or can he just cash the pensions in?? The extra money would be really handy
Do we look to our old age or use it all now if he can cash it in????

shecha

Hi Marie,
Both myself and my hubby have local gov occupational pensions and I contacted the dept that deal with the pensions and they have told me they cannot be cashed in. I was told we either have to leave them frozen until retirement age or get them transferred but this would obviously have to be on the agreement of the Oz employer.
I have also been advised that you can sign something that ensures you don't get taxed twice on the occ pension - but I'm not sure what this is either. Not much help really I know!
I'm a bit worried about this myself too!
I'll keep an eye on your thread to see if you get any other advice.
Shell

andrew63

Hi Guys
I had 4 frozen pensions in the UK and 1 in Ireland plus my wife had one in Ireland too. We* have just completed the process of amalgamating them all and getting them transferred to an Australian scheme that my employer will also contribute to.
* Rather we paid some guy to do all that for us!
This guy/company is based in Brisbane and has a good reputation as many of my aussie friends recommended him. Let me know if you want his details.

Andrew

kirsty&al

Hello,

From the advice I was given:

- Occupational pensions are not taxed until you start drawing on them. Occupational pensions include final salary and COMP (money purchase) schemes. I would guess your local authority scheme is a final salary scheme.

- Private pensions (personal and group private) come under the FIF (Foreign Investment Funds) rules. If you and all of your associates (spouse, partner, children, etc...) have FIFs less than $50k the ATO are not interested. If greater then they become interested. Note that this is a trigger limit not a tax-free limit.

Other things you need to be aware of:

- If you move your pension to Oz, you cannot move it back again if you decide to return to the UK.

- You have 6 months to move your pension without any tax penalty. If you take more than 6 months you can be taxed on the increase in the funds value (note, increase, not the whole fund value). I think since the July 2004 this is taxed at 15% and I think the tax can be paid from the fund (rather than your income). Can someone else confirm or deny this?

- Oz pensions do have some tax advantages when they start paying out.

Hope this helps.
Best Regards
Alistair

Marie_m

Thanks ever so much guys, it's all clear as..........mud
The advice has come in handy but Shell it wasn't what I wanted to hear... I was hoping someone would tell us it can be done and that we were now going to be taking an extra £25k with us!! Never mind, think I may have to call in the services of a financial advisor though

Marie and Paul

shecha

Hi Marie & Paul,
Sorry guys - didn't want to be the bearer of bad news. We were hoping to cash in our pensions too. But double check with your pension people and if you hear any different to what we were told - let me know.
I think Pollyana who posts on here regularly - knows a bit about Local Gov pensions, I'm sure I've seen on here in the past that she easily transferred hers to a private pension scheme and she did it herself and it didn't cost her much.
So I'll private message her and ask her for some further advice too and let you know what she's said.
Good luck
Shell

shecha

Hi Marie & Paul,
I sent a private message to Pollyana and she got back to me.
Polly had an occupational pension with the County Council and she advised that there are forms you can request prior to leaving for Oz which enable you to transfer the Local Gov pension scheme to another occupational pension scheme in Oz. Polly said it was really easy & straightforward and she didn't use a financial advisor to do this.
I have emailed my local pensions office and requested these forms ready for when we leave.
I'm sure there is also a form you can complete to ensure you don't get taxed twice on the pension - I presume so you don't also get taxed by the Oz Government when bringing the find(s) into Oz. When I find this info I'll let you know.
Shell

JAJ

I would be cautious before transferring any UK public sector pension to Australia.

Jeremy

Don

Me too. Better (1) check what the deferred benefits are first, (2) ask for the transfer value then (3) see what benefits the transfer value will buy you in Australia. Compare & contrast; sure - think about tax, exchange rate risk, likelihood of spending the rest of your life in Aus, too.

Marie_m

Thanks every so much for all the information
Contacted the pension companies and they confirmed what you guys had already told us, can't cash it in can only transfer it We've written to them and requested the transfer value so I suppose we'll go from there.
Were lucky enough to have a close family friend who is a financial advisor so if anyone can get the pensions cashed in he will be able to If I can ever catch him in the office.
I will keep you posted.

Marie and Paul

Don

Work out (if you can cash in or transfer) what the value is of money now/ new benefits bought vs existing deferred benefits.

As an example, last time I checked/ asked my company pension was offering about GBP60K transfer value but to buy the same benefits on the open mkt would have cost GBP300k-500K.