New Canada QROPS Provider (at last!)
Oct 17th 2019, 6:36 pm
#46
Just Joined
Joined: Nov 2016
Posts: 25
Re: New Canada QROPS Provider (at last!)
I agree entirely MJW.
But, i.m.h.o, no Advisor should ever have given assurances that Pensions would be transferred to carriers who would always remain on HMRC's list because their compliance procedures were strong and as such they would never be regarded as 'offside'.
Respectfully, no Advisor, employee, client, or anyone else can ever know how things will evolve, or whether efficient/compliant administration units will remain as such. It's also self evident from the events of the last few years that nobody can know what HMRC will do in the future, including re-iterpreting their own rules, with potentially damaging tax/penalty consequences for all other parties involved in the process, none of whom have any control whatever over this.
Implicitly therefore, all carriers who were removed from the list a couple of years ago were non compliant from the outset, as they never met HMRC's rules (as subsequently and retroactively determined solely by them, without anyone having any right of appeal). As such all pension transfers made to those carriers were also arguably offside and potentially subject to penalties of up to 55%.
HMRC's decision to delist all Canadian carriers was seemingly based on the ability of Clients to access RRSP's at any age, (notwithstanding any 'in house' restrictions implemented by a carrier), in contrast to the age 55 UK limit. Quite why it took HMRC so many years to 'discover' what they must have known all along is entirely unclear. However, in removing every carrier, they implicitly categorised every single scheme as non compliant, meaning - according to HMRC guidleines - that they never actually had Q/ROPS status in the first place.
I'm assuming HMRC have not gone after Canadian carriers and Clients simply on the basis that it would be opening a massive tin of worms and a multitude of class action law suits, where HMRC would surely be regarded - at best - as having played a major part in creating the problem, by allowing Clients to 'infer' that a Carriers appearance on their list constituted 'approval', (at least until more recent years when they got their act together and tightened up the wording on their web site). A situation perhaps not entirely dissimilar to the criticism they faced in the ROSIIP case.
The continuing lunacy of HMRC's stance is that yes, prima facie, they need to facilitate and promote the legitimate transfer of pensions, yet their way of doing so through the carrier 'self certification' process, leaves everyone, Advisor and Client alike completely exposed. Which is why many Advisors chose not to enter the market in the first place.
As far as I can see, no-one has provided any information as to how anyone can protect themselves against this highly unsatisfactory situation.
But, i.m.h.o, no Advisor should ever have given assurances that Pensions would be transferred to carriers who would always remain on HMRC's list because their compliance procedures were strong and as such they would never be regarded as 'offside'.
Respectfully, no Advisor, employee, client, or anyone else can ever know how things will evolve, or whether efficient/compliant administration units will remain as such. It's also self evident from the events of the last few years that nobody can know what HMRC will do in the future, including re-iterpreting their own rules, with potentially damaging tax/penalty consequences for all other parties involved in the process, none of whom have any control whatever over this.
Implicitly therefore, all carriers who were removed from the list a couple of years ago were non compliant from the outset, as they never met HMRC's rules (as subsequently and retroactively determined solely by them, without anyone having any right of appeal). As such all pension transfers made to those carriers were also arguably offside and potentially subject to penalties of up to 55%.
HMRC's decision to delist all Canadian carriers was seemingly based on the ability of Clients to access RRSP's at any age, (notwithstanding any 'in house' restrictions implemented by a carrier), in contrast to the age 55 UK limit. Quite why it took HMRC so many years to 'discover' what they must have known all along is entirely unclear. However, in removing every carrier, they implicitly categorised every single scheme as non compliant, meaning - according to HMRC guidleines - that they never actually had Q/ROPS status in the first place.
I'm assuming HMRC have not gone after Canadian carriers and Clients simply on the basis that it would be opening a massive tin of worms and a multitude of class action law suits, where HMRC would surely be regarded - at best - as having played a major part in creating the problem, by allowing Clients to 'infer' that a Carriers appearance on their list constituted 'approval', (at least until more recent years when they got their act together and tightened up the wording on their web site). A situation perhaps not entirely dissimilar to the criticism they faced in the ROSIIP case.
The continuing lunacy of HMRC's stance is that yes, prima facie, they need to facilitate and promote the legitimate transfer of pensions, yet their way of doing so through the carrier 'self certification' process, leaves everyone, Advisor and Client alike completely exposed. Which is why many Advisors chose not to enter the market in the first place.
As far as I can see, no-one has provided any information as to how anyone can protect themselves against this highly unsatisfactory situation.
Last edited by IDB37; Oct 17th 2019 at 6:50 pm.
Oct 17th 2019, 8:26 pm
#47
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Joined: Feb 2008
Location: British Columbia, Canada
Posts: 428
Re: New Canada QROPS Provider (at last!)
The framework is a such as the HMRC laid out ...and i believe your right when you say the HMRC havnt helped in this matter by re interpreting their rules etc etc, but the fact remains, certainly from a Canadian perspective, the companies that applied for QROPS status were large "reputable" companies ....Manulife, Standard Life ( at the time ) BMO, Scotiabank....etc etc, and all obviously felt they followed the correct procedures to apply for QROPS status and the HMRC added them to the list ( based on the information or "tick boxes" they would have had to complete at the time to show that they should appear on the list ) so therefore either all of these companies and respective head office's :
1) lied on the forms
2) grossly misrepresented themselves as a provider
3) felt comfortable that they answered the questions and met the requirements laid out to them by the HMRC
These are not some "spurious" companies or providers......they are some of the largest financial companies in Canada......as an ex financial planner., you have probably placed clients with some of these companies...............so they must have felt that they met the requirements laid out to them by the HMRC......otherwise they wouldn't have proceeded to offer QROPS as a service through their company ! Im sure these companies have diligent people working within their Head Offices that would have gone through the in's and outs of offering this as a service through their company, and wouldn't have committed to offering it if they felt they weren't following correct procedures !.........Im sure it wasnt the intent of any of these providers to be "removed" from the list, as they all felt they had acted properly when applying for QROPS status....and thats why i believe this is important in the HMRC Pension Manual and something the HMRC now realize and recognize, based on how clear they may have been in the past with QROPS :
"Effects of losing your QROPS status
Your scheme won’t be able to receive transfers from UK registered pension schemes or other QROPS free from UK tax. Individuals who want to transfer their pension savings into your scheme will have to pay an unauthorised payment charge of at least 40%.
Your scheme members won’t have to pay an unauthorised payments charge for their transfers if you received it before your scheme lost its QROPS status.
If your scheme stops being a QROPS from 6 April 2017, you should stop accepting transfers after 5 April 2017. Transfers from a registered pension scheme received by your scheme after this date will be unauthorised payments. Both the member and the transferring scheme administrator may be taxed on such transfers."
1) lied on the forms
2) grossly misrepresented themselves as a provider
3) felt comfortable that they answered the questions and met the requirements laid out to them by the HMRC
These are not some "spurious" companies or providers......they are some of the largest financial companies in Canada......as an ex financial planner., you have probably placed clients with some of these companies...............so they must have felt that they met the requirements laid out to them by the HMRC......otherwise they wouldn't have proceeded to offer QROPS as a service through their company ! Im sure these companies have diligent people working within their Head Offices that would have gone through the in's and outs of offering this as a service through their company, and wouldn't have committed to offering it if they felt they weren't following correct procedures !.........Im sure it wasnt the intent of any of these providers to be "removed" from the list, as they all felt they had acted properly when applying for QROPS status....and thats why i believe this is important in the HMRC Pension Manual and something the HMRC now realize and recognize, based on how clear they may have been in the past with QROPS :
"Effects of losing your QROPS status
Your scheme won’t be able to receive transfers from UK registered pension schemes or other QROPS free from UK tax. Individuals who want to transfer their pension savings into your scheme will have to pay an unauthorised payment charge of at least 40%.
Your scheme members won’t have to pay an unauthorised payments charge for their transfers if you received it before your scheme lost its QROPS status.
If your scheme stops being a QROPS from 6 April 2017, you should stop accepting transfers after 5 April 2017. Transfers from a registered pension scheme received by your scheme after this date will be unauthorised payments. Both the member and the transferring scheme administrator may be taxed on such transfers."
Last edited by mjwalker007; Oct 17th 2019 at 8:44 pm.
Oct 17th 2019, 8:49 pm
#48
Just Joined
Joined: Nov 2016
Posts: 25
Re: New Canada QROPS Provider (at last!)
Agreed.
The vast majority/all of the carriers undoubtedly were reputable and genuinely thought they were meeting HMRC requirements. I know that some even took legal advice and received confirmation that they were indeed doing so.
That HMRC's subsequently delisted of all of them further makes the point I am making, i.e. no-one has a cat's chance of protecting themselves.
It seems to me to be completely irrelevant whether or not you, I, or anyone else believes a carrier is complying with the rules (and will continue to do so). That HMRC are the sole arbiter of the rules they themselves set, change and re-interpret retroactively, de-listing schems and issuing fines seemingly on a whim, means the system remains a bad joke.
This thread, particularly from Feb 2017 onwards, contains an interesting debate from many posters, particularly in the light of subsequent events:
Looking for QROPS personal finance expert
The vast majority/all of the carriers undoubtedly were reputable and genuinely thought they were meeting HMRC requirements. I know that some even took legal advice and received confirmation that they were indeed doing so.
That HMRC's subsequently delisted of all of them further makes the point I am making, i.e. no-one has a cat's chance of protecting themselves.
It seems to me to be completely irrelevant whether or not you, I, or anyone else believes a carrier is complying with the rules (and will continue to do so). That HMRC are the sole arbiter of the rules they themselves set, change and re-interpret retroactively, de-listing schems and issuing fines seemingly on a whim, means the system remains a bad joke.
This thread, particularly from Feb 2017 onwards, contains an interesting debate from many posters, particularly in the light of subsequent events:
Looking for QROPS personal finance expert
Oct 17th 2019, 9:59 pm
#49
BE Enthusiast
Joined: Feb 2008
Location: British Columbia, Canada
Posts: 428
Re: New Canada QROPS Provider (at last!)
Further to that thread from Feb 2017 and in light of a comment from "Hurlabrick" within that thread...................The 2 Canadian providers currently on the ROPS list , are accepting transfers for clients aged 55 and over only !
Oct 31st 2019, 4:37 pm
#50
Just Joined
Joined: Oct 2019
Posts: 7
Re: New Canada QROPS Provider (at last!)
hmm whilst good, at the same time, it does not necessarily mean it the best thing for people to transfer too. Further details need looking into and make sure that the reps are up to a high standard of advice.
Firstly, there's no difference in tax between a UK pension and a QROPS in Canada as you will just be taxed at your marginal tax rate in Canada. Therefore a SIPP or an International SIPP is probably as good an option as you would have option to transfer the currency into a separate currency and you would not have to take the exchange rate at the time of transfer?! (someone mentions this here well)
As a QROPS, you would not be able to add this into an existing RRSP and you would have to put this into a separate pot...
I can't see the fee schedule for this here but there would probably be some commission involved? Fee based charging structures are the best to use if you are transferring as there is no bias in the review.
Canadian QROPS were a shambles before and got delisted with advisers not knowing how to do the transfer and taking forever (or not at all). If a scheme gets delisted, then you could be liable to tax at 55%!
If you transfer into a QROPS now and leave the country within 5 years you would receive a 25% tax charge! Plus have a headache of wherever you move to and how this pension would be treated there! Not ideal if you are going back to the UK or elsewhere!
If you have a defined benefit scheme in the UK as the person mentioned he had a shell pension, then they would have to receive advice from a UK based adviser qualified to do so as well to determine if it is beneficial or not! Using a company that has the 'Gold Standard' for pension transfer advice in the UK is advised as they understand these pensions more!
Soooo many different points to consider here and emotional decisions such as 'I want my pension in Canada' does not always mean its the best thing for your retirement. A good financial planner should be able to address all of the above. Anyways... the investments held within pensions are held all over the world so it does not mean that your pension is actually invested in Canada!
Firstly, there's no difference in tax between a UK pension and a QROPS in Canada as you will just be taxed at your marginal tax rate in Canada. Therefore a SIPP or an International SIPP is probably as good an option as you would have option to transfer the currency into a separate currency and you would not have to take the exchange rate at the time of transfer?! (someone mentions this here well)
As a QROPS, you would not be able to add this into an existing RRSP and you would have to put this into a separate pot...
I can't see the fee schedule for this here but there would probably be some commission involved? Fee based charging structures are the best to use if you are transferring as there is no bias in the review.
Canadian QROPS were a shambles before and got delisted with advisers not knowing how to do the transfer and taking forever (or not at all). If a scheme gets delisted, then you could be liable to tax at 55%!
If you transfer into a QROPS now and leave the country within 5 years you would receive a 25% tax charge! Plus have a headache of wherever you move to and how this pension would be treated there! Not ideal if you are going back to the UK or elsewhere!
If you have a defined benefit scheme in the UK as the person mentioned he had a shell pension, then they would have to receive advice from a UK based adviser qualified to do so as well to determine if it is beneficial or not! Using a company that has the 'Gold Standard' for pension transfer advice in the UK is advised as they understand these pensions more!
Soooo many different points to consider here and emotional decisions such as 'I want my pension in Canada' does not always mean its the best thing for your retirement. A good financial planner should be able to address all of the above. Anyways... the investments held within pensions are held all over the world so it does not mean that your pension is actually invested in Canada!
Oct 31st 2019, 5:05 pm
#51
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: New Canada QROPS Provider (at last!)
hmm whilst good, at the same time, it does not necessarily mean it the best thing for people to transfer too. Further details need looking into and make sure that the reps are up to a high standard of advice.
Firstly, there's no difference in tax between a UK pension and a QROPS in Canada as you will just be taxed at your marginal tax rate in Canada. Therefore a SIPP or an International SIPP is probably as good an option as you would have option to transfer the currency into a separate currency and you would not have to take the exchange rate at the time of transfer?! (someone mentions this here well)
As a QROPS, you would not be able to add this into an existing RRSP and you would have to put this into a separate pot...
I can't see the fee schedule for this here but there would probably be some commission involved? Fee based charging structures are the best to use if you are transferring as there is no bias in the review.
Canadian QROPS were a shambles before and got delisted with advisers not knowing how to do the transfer and taking forever (or not at all). If a scheme gets delisted, then you could be liable to tax at 55%!
If you transfer into a QROPS now and leave the country within 5 years you would receive a 25% tax charge! Plus have a headache of wherever you move to and how this pension would be treated there! Not ideal if you are going back to the UK or elsewhere!
If you have a defined benefit scheme in the UK as the person mentioned he had a shell pension, then they would have to receive advice from a UK based adviser qualified to do so as well to determine if it is beneficial or not! Using a company that has the 'Gold Standard' for pension transfer advice in the UK is advised as they understand these pensions more!
Soooo many different points to consider here and emotional decisions such as 'I want my pension in Canada' does not always mean its the best thing for your retirement. A good financial planner should be able to address all of the above. Anyways... the investments held within pensions are held all over the world so it does not mean that your pension is actually invested in Canada!
Firstly, there's no difference in tax between a UK pension and a QROPS in Canada as you will just be taxed at your marginal tax rate in Canada. Therefore a SIPP or an International SIPP is probably as good an option as you would have option to transfer the currency into a separate currency and you would not have to take the exchange rate at the time of transfer?! (someone mentions this here well)
As a QROPS, you would not be able to add this into an existing RRSP and you would have to put this into a separate pot...
I can't see the fee schedule for this here but there would probably be some commission involved? Fee based charging structures are the best to use if you are transferring as there is no bias in the review.
Canadian QROPS were a shambles before and got delisted with advisers not knowing how to do the transfer and taking forever (or not at all). If a scheme gets delisted, then you could be liable to tax at 55%!
If you transfer into a QROPS now and leave the country within 5 years you would receive a 25% tax charge! Plus have a headache of wherever you move to and how this pension would be treated there! Not ideal if you are going back to the UK or elsewhere!
If you have a defined benefit scheme in the UK as the person mentioned he had a shell pension, then they would have to receive advice from a UK based adviser qualified to do so as well to determine if it is beneficial or not! Using a company that has the 'Gold Standard' for pension transfer advice in the UK is advised as they understand these pensions more!
Soooo many different points to consider here and emotional decisions such as 'I want my pension in Canada' does not always mean its the best thing for your retirement. A good financial planner should be able to address all of the above. Anyways... the investments held within pensions are held all over the world so it does not mean that your pension is actually invested in Canada!
Oct 31st 2019, 5:05 pm
#52
BE Enthusiast
Joined: Feb 2008
Location: British Columbia, Canada
Posts: 428
Re: New Canada QROPS Provider (at last!)
Hi Banff69,
Just noticed that this is your first post and yet very detailed............it would be interesting to know what UK or International SIPP provider you work for ?
Just noticed that this is your first post and yet very detailed............it would be interesting to know what UK or International SIPP provider you work for ?
Oct 31st 2019, 5:08 pm
#53
BE Enthusiast
Joined: Feb 2008
Location: British Columbia, Canada
Posts: 428
Oct 31st 2019, 5:45 pm
#54
Assimilated Pauper
Joined: Mar 2005
Location: Ontario
Posts: 40,018
Re: New Canada QROPS Provider (at last!)
I thought the post more interesting because there was no sales pitch, no invitation to "reach out" (presumably to slap the poster).
Oct 31st 2019, 5:55 pm
#55
BE Enthusiast
Joined: Feb 2008
Location: British Columbia, Canada
Posts: 428
Re: New Canada QROPS Provider (at last!)
Also as a "first" post, if there had of been any "direct" advertising, the MODS would have pulled it down, just like they did for a company that were advertising on their "first" post , just after the info posted by Banff69 .
Last edited by mjwalker007; Oct 31st 2019 at 6:08 pm.
Oct 31st 2019, 7:06 pm
#56
Assimilated Pauper
Joined: Mar 2005
Location: Ontario
Posts: 40,018
Re: New Canada QROPS Provider (at last!)
just like they did for a company that were advertising on their "first" post , just after the info posted by Banff69 .
Nov 1st 2019, 1:21 am
#57
Banned
Joined: Nov 2019
Posts: 3
Re: New Canada QROPS Provider (at last!)
looked at their website , I would be dubious about bringing money to an investment group as opposed to a bank. We managed to move 2 small pensions to Scotiabank but missed out on others as they were so useless and slow at processing and really want to move our other ones but not sure this would be safe ??
Nov 1st 2019, 4:17 pm
#58
BE Enthusiast
Joined: Feb 2008
Location: British Columbia, Canada
Posts: 428
Re: New Canada QROPS Provider (at last!)
looked at their website , I would be dubious about bringing money to an investment group as opposed to a bank. We managed to move 2 small pensions to Scotiabank but missed out on others as they were so useless and slow at processing and really want to move our other ones but not sure this would be safe ??
You may be unfamiliar with the name and therefore can totally understand your reservations of IA, but can reassure you that I A are one of the largest and oldest Insurance and Investment groups within Canada. They were formed in 1892 so have a pretty long standing track record, especially as one of the largest Public Companies listed on the Toronto Stock Market.
They look after over $180 Billion in clients assets , and have over 4 million clients ! https://ia.ca/about-us
All of the above coupled with an overall Corporation credit rating with "Standard & Poor" of A , should hopefully put your mind at rest that this company is as safe as any other when it comes to looking after Canadians financial assets. https://ia.ca/investorrelations
Nov 4th 2019, 10:14 am
#59
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Joined: Dec 2016
Location: St Catharines, Ontario From Bournemouth UK
Posts: 417
Re: New Canada QROPS Provider (at last!)
Hi lindaesplinmchugh,
You may be unfamiliar with the name and therefore can totally understand your reservations of IA, but can reassure you that I A are one of the largest and oldest Insurance and Investment groups within Canada. They were formed in 1892 so have a pretty long standing track record, especially as one of the largest Public Companies listed on the Toronto Stock Market.
They look after over $180 Billion in clients assets , and have over 4 million clients ! https://ia.ca/about-us
All of the above coupled with an overall Corporation credit rating with "Standard & Poor" of A , should hopefully put your mind at rest that this company is as safe as any other when it comes to looking after Canadians financial assets. https://ia.ca/investorrelations
You may be unfamiliar with the name and therefore can totally understand your reservations of IA, but can reassure you that I A are one of the largest and oldest Insurance and Investment groups within Canada. They were formed in 1892 so have a pretty long standing track record, especially as one of the largest Public Companies listed on the Toronto Stock Market.
They look after over $180 Billion in clients assets , and have over 4 million clients ! https://ia.ca/about-us
All of the above coupled with an overall Corporation credit rating with "Standard & Poor" of A , should hopefully put your mind at rest that this company is as safe as any other when it comes to looking after Canadians financial assets. https://ia.ca/investorrelations
Nov 4th 2019, 3:55 pm
#60
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: New Canada QROPS Provider (at last!)
Just because the company had existed for so long, does not imply they are any good. I have reviewed the funds they offer and the majority are mediocre. Where you hold your pension does not matter. It's the investment returns that count the most. I am happy to keep my pension in the UK and invest with a well managed fund. To mitigate sterling risk, I invest the vast majority in Global funds.