Eltoro

Can anyone offer any advice or a good contact that will help us transfer two uk private pensions to Oz.
We head over on the 17th march and would really like to have things sorted with pensions before we leave.

Any Info appreciated.

Thanks

can128

Hi there, I will be doing the same in july/aug , I've done a bit of research and would suggest, that A) if you have 100% decided to transfer them, then do it yourself... contact you private pension companies and ask them what there porcess is to transfer. Many Australian companies , like REST for example , will do the transfer for you themselves from their end, with no cost to you!!
B) If you dont know whether to take your pensions or leave them in the UK, then thats when asking a Pension adviser can pay off , as they can best inform you of the pro's and con's.....but that still doesn't mean you need to pay someone to do the transfer for you, unless of course it will give you peace of mind!!
C) I wouldn't panic about getting them sorted before you go , do some research and understand what your pension companies requirements are, but I would spend some time when you get to OZ checking the different super funds and finding the right one for you....

hope this helps.

Craig.

wongstonn

Hi there

Did you know you can transfer it yourself....easily? Sure an agent can help you but they'll charge you a percentage of your pension fund for the privilege.

Did you realise that transferring a private pension requires you simply to get a set of transfer forms from your Aussie employer, and perhaps some from your UK pension provider...fill them in then send them off....and it's done?

Aussie firms (at least larger ones) usually have a supoerannuation department that is very used to doing this kind of stuff.

Neil

Eltoro

Thanks Craig & Neil, We honestly didn't think it would be that straight forward . Anyway I will certainly just make the phone calls myself and save a few $$ .
I had a look at one company online yesterday before I posted this question and they wanted $300 per hour .

Thanks very much for your advice, very much appreciated .

Regards
Sandra.

Alex Hall

Considerations...

1. QROPS

The pension provider that you choose in Australia should be a Qualifying Recognised Overseas Pension Schemes (QROPS) as identified by the UK Revenue & Customs. Otherwise you run the risk of having to pay tax on your pension e.g. you might have to pay 40% on the value of your fund etc.

http://www.hmrc.gov.uk/PENSIONSCHEMES/qrops-list.htm

Even if the superannuation fund is a member of QROPS they may not yet be ready to accept UK transfers. e.g. Australian Super is on QROPS however they responded with the following to my query:

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My subsequent query on timescales received the response.

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2. Australian Migrant Tax Rule

In addition to the above, Australia will give you 6 months grace from when you arrive in Australia in which to transfer your pension over. After this six month period you will begin to pay income tax on the difference in value from when you arrived until the time when you transfer it over.

Note: There are other tax implications of keeping your pension in the UK, search the forum or speak to an expert for more details.

3. Eligibility

In order to join a Superannuation fund in Australia I believe (although don't quote me on it) that you need to be employed in Australia and you'll also need Tax File Numbers etc etc

Therefore it might make sense to wait until you are here and employed to make the transfer.

I know some companies/agents will "employ" you just so that you are officially employed and can transfer your pension over


4. Industry Funds / Fees

You will need to decide what Super to transfer to in Australia. The advantage of the "Industry Super Funds" (e.g. MTAA, Australian Super, CARE Super etc) is that they generally have no/low fees for joining or exiting the fund (e.g. http://www.caresuper.com.au/members_low-fees.aspx). This is important as other funds may charge you a 1-3% fee taken from your pension/super when joining (or possibly leaving). So make sure you have a lot of clarity on the fees before deciding.

As an aside some of the Industry Funds such as MTAA have been the best performing, so don't believe someone telling you that while the fees are low on Industry Supers the performance is not so good. DO some research on the Internet (there are plenty of websites and info with performance comparison tables)

5. Using an Agent

If you use an agent to transfer your pension you may end up seeing your super value decrease by around 5%. The agent won't get all of this, they will however take a cut for their service (and rightly so!).

1. Depending on which pension fund you have in the UK you may need to pay an exit fee (so investigate whether it makes sense to move to a UK Stakeholder pension first which have low fees)
2. The agent will take a cut
3. Depending on what fund the agent/you have chosen you may have to pay a 2%+ joining fee

So overall I have seen people on the forum and know from family members that many are seeing their funds decrease by 5% or 5000 during the transfer.

If you transfer the pension yourself it may be a bit more hassle but in theory some of the above fees should no longer be payable, e.g. the agent won't get paid and if you choose a QROPS Industry Super Fund then you won't need to pay any joining fee. You will still be at the mercy of the exchange rate etc though. People have and continue to transfer their own pensions so it can be done on your own.

Whether you decide to use an agent is something you'll need to decide on yourself. There seems to be positive reviews for the likes of Collet & Co, PRISM Xpat, and negative reviews of some of the others. Do a search of the forum.

A Possible Solution

If you find yourself in a slight dilema of wanting to transfer your UK pension to SuperFund "X" (for example MTAA), however SuperFund "X" is not on the QROPS list or if it is then it is not yet ready to accept transfers then consider the following:

1. If one was to transfer ones UK pension to an QROPS Industry Super then one would pay no joining fee, and if one chose the cash fund within the Super then the admin fee would be low. e.g. http://www.caresuper.com.au/members_low-fees.aspx - cash asset would be 0.18% together with a $1.50 per week charge. This would satisfy UK HMRC QROPS/Tax rules
2. One could then transfer out of the above fund into ones fund of choice (which wouldn't have to be QROPS etc). You would pay no exit fee from the above.

I'm not suggesting you do this, or that it would work. However there are plenty of things to consider.



DISCLAIMER: I should add I am not a tax/super/finance authorised person, so don't take any of what I have written as advice! Do your own research and make your own decisions! If finance is something that makes you ill then use a reputable agent and sleep well at night!

hth

Alex

Alan Collett

Thanks for the mention, Alex.

For reference I applied to the UK Revenue for QROPS approval for my personal self managed superannuation fund. It took about 3 weeks, and the completion of one UK Revenue form.

Best regards.

DrWho

Top post... BFO K...

GLR

A very useful post Alex. The only additions I would make are:

1. You're quite right that a number of funds on the HMRC QROPS list are not actually ready yet to receive transfers. Care Super is another one of them - they also informed me that it would be some months until they were ready to receive transfers. Definitely worth checking and double checking before you go with a Super fund even if they are on the list.

3. I don't believe that you do have to be employed in Australia to join a Super. Most Industry funds have personal super accounts alongside their employer super accounts. I've joined a couple of supers despite being self employed here.

I fear that there is a problem with your solution of moving to a QROPS and then transferring out to a non-QROPS super. My understanding is that the QROPS has an ongoing reporting obligation to the UK HMRC and so they will have to report if you switch out. HMRC may then come after you with a tax bill for moving to a non-QROPS. How they would find you and extract the cash is another matter...

Just my opinion on this one. Usual disclaimers apply e.g I'm not a tax professional, none of the above is advice, do your own research and obtain your own advice.

Cheers

GLR