DesperateHomer

We’re a family of four. I’m 44 and my wife is 43.
My wife and I have a mixture of personal pensions, deferred final salary pensions and, of course, there’s the UK state pension to consider.

Is it an unrealistic question to ask what the implications are for the pensions should we decide to migrate from UK to OZ?

Any other pension related advice for potential migrants.

(I’m particularly concerned about moving the existing pensions)

RRZ

Hi

I've been in Australia for five years and only this week have I got round to looking at moving my two final salary pensions. I've looked the forums, and have been scratching around the various sites trying to work out the costs ... which seem to range from reasonable to "rip offs". Generally, based on an entire weeks study , I would say ...1) bring across the Personal pensions, they might be liable for a ludricrous Australian tax called "FIF" which is too complicated to summarise, 2) be more careful regarding your final salary schemes. Get an Acturarial report done, which seems standard, to assess what's the best course of action. I have the strong impression that the recent superannuation changes in Oz (no tax on super after age 60) have tilted the balance in most cases to transferring them.

Finally, if you bring your pension over within 6 months of being resident, no tax .. if you bring it over later you are taxed on how much the value has risen since you became resident. I think the tax rate is 15% ...

OK, now let the corrections begin..

Discovery

Australia is probably the only western country where pension contributions, investment income and emerging pension benefits are all taxed. Benefits arising from unfunded schemes will still be subject to tax after age 60.

Australia Immigration

Hi

As of the 30.06.07 new superannuation (pensions) laws begin. There are many concessions until this date to encourage fund migration to super funds.

It might be worth you discussing this with a expert on pensions and international pension transfer and opportunities to place funds into the new superannuation funds as of 01.07.07.

Any problems - PM or message.

Kind regards

Chris

RRZ

I'm not sure everyone should be in too much of a rush. Don't leave it five years(!), but unless you've got a AUD1M to bring now (lucky you) then take some time to think it through carefully. Once the monies here it isn't going out again, so make sure this is where you are staying for good

Indeed, you will need to talk to the experts, but take the time to look around. A misspent weekend saw me identify at least six and I've got to say, without really knowing how difficult this is, some of the charges seem very high. Why, for example, charge a % of the amount transferred??

I found the following, there are probably many more, particularly in the UK:

Pension Transfers Direct (part of Genesys) $A330 then around 4% of the value transferred
Global Pension Transfers (also part of Genesys) – transfer plus advice costs between 3.3% and 5.5%
Global Destiny – Free report then up to 3.5% deducted from the transfer (does this mean they hold your money?)
UHY Haines Norton (Perth) - $A2500 plus
Exfin – a new service - $A1500 fixed, including Actuarial report and transfer.
Prism Xpat – can’t find clear prices – a search of the forums suggests 500pounds + 5%, this seems too high (I hope)
Montfort seems a clear “no go” according to "advice"

Finally, you might find your friendly superfund will do it for you - mine won't, but it should be possible. Would love to hear from anyone who had persuaded their (public) fund to do it for them

supersonic4

We are transferring John's pension over here and not paying a cent for it to be done ,all we did was find a qrops rated fund ,we are using amp and they are doing it and no fees at all.Once it done we can change it to another fund with qrops rating if we want to..

RRZ

Sounds good, I've always preferred industry funds because of lower fees but you're quite right about being able to transfer. Can I ask you about "tax" - I've been out here 5 years and have two final salary schemes in the UK - so I've been told I would have to get an actuary to calculate my tax. I don't suppose AMP were kind enough ...

supersonic4

Can't help you with that sorry,we are lucky that we have got it sorted within the 6 month time limit.I do remember seeing a post on the same thing so try the seach,hopefully you will find some one in the same boat.
cheers
lorri

Sue from Manchester

With the change of rules here for superan I decided to transfer my 3 company pension schemes over. Working in the higher education sector my superan company (UniSuper) are doing it for me free but I don't know whether the UK funds will charge anything. I asked them to transfer them just before Christmas. So far only one pension fund have replied. They certainly take their own sweet time.

Like a previous poster said, don't rush into things. You need to make sure this is where you are staying. On balance I decided I wanted everything in the one fund because it is a good superan fund and having three small pensions isn't cost effective from a management point of view.

Gabriel

I read somewhere that if the annual interest on the Foreign Pension Fund is less than AU$ 50,000, you don't get taxed on it.

Is it so, or is there something I'm missing? Or is it that interest is added every year until it reaches AU$ 50,000, then it gets taxed?

I'm foggy here, as many others. Could someone please make this clear?

I have started my pension fund 3 years ago and it is still low, it will take a few years till it starts to gain, and even then the ratio will be a few thousand dollars a year. How will the taxes work on this?

Alan Collett

The Foreign Investment Fund Rules apply to investments such as pensions and other investments that are left outside Australia when an individual who has an interest in such a product is a tax resident of Australia.

There are exemptions from the application of the FIF Rules, for example where the total value of your interests in FIFs (together with those of your associates) is less than A$50,000.

Another exemption is available in respect of "employer sponsored" foreign superannuation funds.

Have a look here for more details of FIF exemptions:
http://www.ato.gov.au/individuals/co...htm&page=19&H6

There are also some free tax factsheets here:
http://www.collettandco.com

Best regards.

Alan Collett

It is probable you (or more probably the superannuation fund that receives the pension transfer) will have a liability to tax as and when you make a pension transfer computed under the provisions of section 27CAA of the Income Tax Assessment Act 1936.

The amount of assessable income will be computed with reference to the value of the fund on the date you became a tax resident of Australia.

Best regards.

RRZ

Unfortunately, I now appreciate that I suppose what confuses me most is how they (the tax men) calculate it. I certainly don't know what the value of my final salary pensions were 5 years ago. Can the Trustees of the Fund back in the UK tell me the value then and now, and is that what they tax at 15%?? Or do I need an actuarial report?

I can see some value in a report anyway because it will, I hope, give me some confidence that the Trustees in the UK have been fair. Or should I just take it on faith? I find that a little bit hard.