Pensions
#1
Pensions
I have paid into my Local Government (Teachers) Pension for the last twelve years. Can anyone recommend what I should do with this when I move to Australia?
#2
Re: Pensions
Certainly can't *recommend* a course of action, but I believe you can either keep your money in the scheme as a "deferred pension" (ie., you'll start getting it at retirement age) or transfer the cash value across to an Australian super fund. There are strict conditions attached to that option: I think it has to be completed within 6 months of arrival and has to be done into an authorised fund. There are companies who will do it within the regs but I think they charge outrageously for it. It *is* quite possible to DIY, but make sure you act within the rules or you will be taxed.
#3
Forum Regular
Joined: May 2007
Location: Greenwith, Adelaide, South Australia!
Posts: 89
Re: Pensions
very very similar situation as yourself OP, we went to a meeting with one of the companies who deal with this and the advice can be summarised as (but may not be true in all cases):
if you plan on coming back don't transfer as the scheme you are in is just too good to leave
if you are going you need to have it done within 6 months, the advice was better to start sooner as you know how dealing with civil service etc can be to get data from
whether to transfer comes down to a lot of rules and calcs which I haven't got a scooby on. which is where the company comes in.
Not trying to recommend anything but for a fee I'm having the values and fees calculated of leaving and taking to supers calculated, this will give me a report and should make a founded decision based numbers on which we should do. We aren't being charged an incredible amount (IMHO) for this part.
If we decide to transfer then it is a commission based process, I have yet to sit and see what the numbers mean - it may be I try to shop around for that part as a few % different could be quite a few quid.
Me personally don't know enough about the rules etc to do this, so that is why I am engaging an expert, I may curse them in 30 years time!
if you plan on coming back don't transfer as the scheme you are in is just too good to leave
if you are going you need to have it done within 6 months, the advice was better to start sooner as you know how dealing with civil service etc can be to get data from
whether to transfer comes down to a lot of rules and calcs which I haven't got a scooby on. which is where the company comes in.
Not trying to recommend anything but for a fee I'm having the values and fees calculated of leaving and taking to supers calculated, this will give me a report and should make a founded decision based numbers on which we should do. We aren't being charged an incredible amount (IMHO) for this part.
If we decide to transfer then it is a commission based process, I have yet to sit and see what the numbers mean - it may be I try to shop around for that part as a few % different could be quite a few quid.
Me personally don't know enough about the rules etc to do this, so that is why I am engaging an expert, I may curse them in 30 years time!
#4
Forum Regular
Joined: Apr 2008
Location: Manchester, UK
Posts: 47
Re: Pensions
Hi,
Is it a final salary pension? I believe it is for Teachers.
As said above, it is very complicated.
I wouldn't transfer, as apparently there is no equivalent in OZ, you would just get your transfer value to take into an Australian Super scheme. Although the transfer value will look large, there are a lot of complicated calculations to make to see if you were better off.
Essentially, your Teachers' pension will pay you 12/60 (or some fraction depending on scheme) of your final salary every year after you retire. This will be inflation linked too. You will also get a tax free cash sum.
If you transfer this to Australia, there is no guaranteed income you rely on investment performance to increase the value of your fund, and then you buy an annuity (or income) for the rest of your life. I think (not 100% on Australian Supers yet!)
I used to be an IFA, and still work in financial services, but may have lost a little knowledge over the last year or two!
My Wife has an NHS final salary pension scheme with 6 years service and we're going to leave that here.
It all depends on what your Teachers pension will pay (income and tax free cash - but this may not be tax-free in OZ!) versus what the transfer value plus investment growth will buy you in an annuity in xx years time. There is no right and wrong answer.
The best thing would to take some advice, but insist on paying a fee - that way you know you are not being sold something for commission.
If it were me, I'd request a benefit projection from the Teachers pension and take it from there.
I'm not a financial adviser, but if you want to run anything by me, PM me and I'll try to explain in greater detail!
Rich
Is it a final salary pension? I believe it is for Teachers.
As said above, it is very complicated.
I wouldn't transfer, as apparently there is no equivalent in OZ, you would just get your transfer value to take into an Australian Super scheme. Although the transfer value will look large, there are a lot of complicated calculations to make to see if you were better off.
Essentially, your Teachers' pension will pay you 12/60 (or some fraction depending on scheme) of your final salary every year after you retire. This will be inflation linked too. You will also get a tax free cash sum.
If you transfer this to Australia, there is no guaranteed income you rely on investment performance to increase the value of your fund, and then you buy an annuity (or income) for the rest of your life. I think (not 100% on Australian Supers yet!)
I used to be an IFA, and still work in financial services, but may have lost a little knowledge over the last year or two!
My Wife has an NHS final salary pension scheme with 6 years service and we're going to leave that here.
It all depends on what your Teachers pension will pay (income and tax free cash - but this may not be tax-free in OZ!) versus what the transfer value plus investment growth will buy you in an annuity in xx years time. There is no right and wrong answer.
The best thing would to take some advice, but insist on paying a fee - that way you know you are not being sold something for commission.
If it were me, I'd request a benefit projection from the Teachers pension and take it from there.
I'm not a financial adviser, but if you want to run anything by me, PM me and I'll try to explain in greater detail!
Rich
#5
Re: Pensions
Hi,
Is it a final salary pension? I believe it is for Teachers.
As said above, it is very complicated.
I wouldn't transfer, as apparently there is no equivalent in OZ, you would just get your transfer value to take into an Australian Super scheme. Although the transfer value will look large, there are a lot of complicated calculations to make to see if you were better off.
Essentially, your Teachers' pension will pay you 12/60 (or some fraction depending on scheme) of your final salary every year after you retire. This will be inflation linked too. You will also get a tax free cash sum.
If you transfer this to Australia, there is no guaranteed income you rely on investment performance to increase the value of your fund, and then you buy an annuity (or income) for the rest of your life. I think (not 100% on Australian Supers yet!)
I used to be an IFA, and still work in financial services, but may have lost a little knowledge over the last year or two!
My Wife has an NHS final salary pension scheme with 6 years service and we're going to leave that here.
It all depends on what your Teachers pension will pay (income and tax free cash - but this may not be tax-free in OZ!) versus what the transfer value plus investment growth will buy you in an annuity in xx years time. There is no right and wrong answer.
The best thing would to take some advice, but insist on paying a fee - that way you know you are not being sold something for commission.
If it were me, I'd request a benefit projection from the Teachers pension and take it from there.
I'm not a financial adviser, but if you want to run anything by me, PM me and I'll try to explain in greater detail!
Rich
Is it a final salary pension? I believe it is for Teachers.
As said above, it is very complicated.
I wouldn't transfer, as apparently there is no equivalent in OZ, you would just get your transfer value to take into an Australian Super scheme. Although the transfer value will look large, there are a lot of complicated calculations to make to see if you were better off.
Essentially, your Teachers' pension will pay you 12/60 (or some fraction depending on scheme) of your final salary every year after you retire. This will be inflation linked too. You will also get a tax free cash sum.
If you transfer this to Australia, there is no guaranteed income you rely on investment performance to increase the value of your fund, and then you buy an annuity (or income) for the rest of your life. I think (not 100% on Australian Supers yet!)
I used to be an IFA, and still work in financial services, but may have lost a little knowledge over the last year or two!
My Wife has an NHS final salary pension scheme with 6 years service and we're going to leave that here.
It all depends on what your Teachers pension will pay (income and tax free cash - but this may not be tax-free in OZ!) versus what the transfer value plus investment growth will buy you in an annuity in xx years time. There is no right and wrong answer.
The best thing would to take some advice, but insist on paying a fee - that way you know you are not being sold something for commission.
If it were me, I'd request a benefit projection from the Teachers pension and take it from there.
I'm not a financial adviser, but if you want to run anything by me, PM me and I'll try to explain in greater detail!
Rich
Thanks again.