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UK Pension Transfer to Canada

UK Pension Transfer to Canada

Old Jan 17th 2011, 4:47 am
  #136  
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Default Re: UK Pension Transfer to Canada

Originally Posted by Southcote
Wow - Thanks for letting me know. I'm curious though - how would HMRC know if you withdrew money from a plan in Canada, and why would they care ?
The receiving scheme in Canada is obliged to report any withdrawls within this 5 year period to the HMRC, therefore that is how they would know and where to contact you. In order to get QROPS qualification from the HMRC there are certain rules that the Canadian schemes have to follow, with this being one of those rules.

The reason the HMRC care is that they do not want people to abuse the pension system and be able to do something they they would not normally be able to do with a U.K pension if they were still in the U.K. QROPS is available all over the world so they do not want people to transfer a pension to a jurisdiction that would allow them to cash it in , then return back to the U.K, so therefore flouting the current U.K pension rules. Although they deem that if you have been left the U.K for 5 years, the chances are you may not be coming back, so relaxing the unauthorized penalty rule.
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Old Jan 17th 2011, 1:03 pm
  #137  
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Default Re: UK Pension Transfer to Canada

Originally Posted by mjwalker007
The receiving scheme in Canada is obliged to report any withdrawls within this 5 year period to the HMRC, therefore that is how they would know and where to contact you. In order to get QROPS qualification from the HMRC there are certain rules that the Canadian schemes have to follow, with this being one of those rules.

The reason the HMRC care is that they do not want people to abuse the pension system and be able to do something they they would not normally be able to do with a U.K pension if they were still in the U.K. QROPS is available all over the world so they do not want people to transfer a pension to a jurisdiction that would allow them to cash it in , then return back to the U.K, so therefore flouting the current U.K pension rules. Although they deem that if you have been left the U.K for 5 years, the chances are you may not be coming back, so relaxing the unauthorized penalty rule.
So the 5 year rule applies to the date you moved to Canada, or the date you transferred these fund sto Canada ?
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Old Jan 17th 2011, 1:57 pm
  #138  
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Default Re: UK Pension Transfer to Canada

Originally Posted by Southcote
So the 5 year rule applies to the date you moved to Canada, or the date you transferred these fund sto Canada ?
Hi Southcote,

The 5 years starts from the date you became non-resident from the U.K , not from the date you transfererred the funds out of the U.K.

Last edited by mjwalker007; Jan 17th 2011 at 2:01 pm.
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Old Jan 20th 2011, 4:33 pm
  #139  
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Default Re: UK Pension Transfer to Canada

Originally Posted by Journeyman Electrician
Can anyone help, in the UK I opted out of the state pension and started a private pension with HSBC. Where do I stand with transfering this fund to Canada and am I still entitled to continuing UK pension payments.

Any direction is much apprciated.
The Bank of Montreal have now started transferring UK pensions from Canada and put it into a RSP for you which only ties it up for 5 years and then you can invest where you would like. They handle everything if you are interested in how them please feel free to PM me.
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Old Jan 24th 2011, 7:43 am
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Default Re: UK Pension Transfer to Canada

Originally Posted by mjwalker007
Yes my wife was a mental health nurse in the u.k as she is now in Canada and I have transferred her National Health Pension across !
I too am looking to transfer my NHS pension. I would be very grateful if you have any information regarding this. Thanks
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Old Jan 24th 2011, 2:19 pm
  #141  
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Default Re: UK Pension Transfer to Canada

Originally Posted by samjr400
I too am looking to transfer my NHS pension. I would be very grateful if you have any information regarding this. Thanks
Hi samjr400,

With regards to transferring your NHS pension to Canada, it would have to be transferred via the QROPS route and the money can then go directly into a QROPS qualified RRSP provider in Canada.

I have transferred many NHS pensions from the UK to Canada. It seems that along with Police Officers, this is the second most popular pension transfer for clients based in Alberta.

As this is a popular topic I have attached a link where this has been discussed previously at great length, so hopefully you will be able to find the information that you are looking at.

http://britishexpats.com/forum/showt...=486579&page=7

If you need any further help please do not hesitate to contact me.

Thanks.
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Old Jan 28th 2011, 12:36 am
  #142  
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Default Re: UK Pension Transfer to Canada

Hi samjr400,

QROPS are a worldwide investment option allowing you to transfer your UK Pension to an approved scheme in any country that you choose. I provide advice on NZ schemes which are more flexible in terms of capital access and retirement ages.

Here's my top tips when researching QROPS schemes:
1) Fee's - don't let the advisers overcharge!
More than 2.5% is too much. Ideally you should agree a fixed price before proceeding which will most likely represent between 1% -2% of the amount you are transferring. Often there are two sets of fees, one for the transfer (paid to the adviser that arranges the initial transfer, provides the advice, and liases with the companies involved), and one as an annual fund charge.
2) Check the rules.
Different schemes have different rules in terms of accessing capital, retirement ages differ, the investment options, and the ability to hold currency. Check what you need and then find a scheme that suits.
3) Capital - what can you withdraw and what are the penalties!
There are many myths about when and how much capital you can access. Make sure YOU know the rules. If your adviser gets this part wrong, find a better adviser. The penalties are upto 55% levied by HMRC.
4) Final Salary or Defined Contributions schemes.
Know what type of scheme you have. Final Salary schemes, such as the NHS, are highly valued with many long term benefits. Make sure you receive appropiate advice in this area to protect your own long term wealth.
5) Currency
Some QROPS schemes have multicurrency options and investment selections. For example, if the Pound is low compared to the Canadian Dollar, you may wish to hold Pounds until the exchange rate improves. In the meantime, perhaps you wish to buy UK investments in GBP. This also applies to USD, AUD, NZD, EURO and so on.

Hope that helps. Happy to answer questions should you have any.
Regards,
chc4me

Last edited by chc4me; Jan 28th 2011 at 12:41 am.
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Old Jan 28th 2011, 2:28 pm
  #143  
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Default Re: UK Pension Transfer to Canada

Thank you both for the information, it is much appreciated, as it is an area where I am admittedly clueless and need to read up on etc
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Old Jan 28th 2011, 11:06 pm
  #144  
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Default Re: UK Pension Transfer to Canada

I emigrated in 2008 having worked for a UK Pensions Specialist in the UK. There are a lot of worrying comments on here regarding QROPS. It is in very rare instances that any informed person would transfer into a QROPS from a sound Final Salary Scheme such as NHS etc.

The guarantees and benefits being given up are considerable. The only exception would be where enhancing Spousal benefits or Death Benefits for next of kin are of prime concern.

QROPS in Singapore and Hong Kong have already lost their recognised status and there is concern that New Zealand could also lose theirs. In most cases, the adviser has not been regulated by the FSA and there is no comeback for bad advice. QROPS are not 'Approved' schemes. the HMRC merely recognises them. Whilst there is a good case to consider QROPS in some circumstances, many advisers have jumped on the bandwagon. Do your research very carefully. I am now a financial advisor in Canada, but my UK pensions remain in the UK for the time being.
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Old Jan 29th 2011, 1:06 am
  #145  
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Default Re: UK Pension Transfer to Canada

Originally Posted by Spoons1961
I emigrated in 2008 having worked for a UK Pensions Specialist in the UK. There are a lot of worrying comments on here regarding QROPS. It is in very rare instances that any informed person would transfer into a QROPS from a sound Final Salary Scheme such as NHS etc.

The guarantees and benefits being given up are considerable. The only exception would be where enhancing Spousal benefits or Death Benefits for next of kin are of prime concern.

QROPS in Singapore and Hong Kong have already lost their recognised status and there is concern that New Zealand could also lose theirs. In most cases, the adviser has not been regulated by the FSA and there is no comeback for bad advice. QROPS are not 'Approved' schemes. the HMRC merely recognises them. Whilst there is a good case to consider QROPS in some circumstances, many advisers have jumped on the bandwagon. Do your research very carefully. I am now a financial advisor in Canada, but my UK pensions remain in the UK for the time being.
Hi Spoons1961,

With regards to QROPS , the UK Pension cannot be transferred out of the UK unless the HMRC has granted the receiving scheme QROPS status. The receiving scheme has to apply to the HMRC to receive this status. You are quite right that some jurisdictions have had their QROPS status terminated by the HMRC ,and for good reason. Singapore lost its QROPS status as it was encouraging an abuse of the rules and people were encouraged to move their funds there purely with the intention of fully encashing them or "pensionbusting'', which is totally against the spirit of what QROPS was set up for.This is the reason that the HMRC took action against Singapore.Hong Kong QROPS have not been revoked, only one particular provider has had their QROPS revoked. http://www.hmrc.gov.uk/pensionschemes/qrops.pdf

In regards to moving your pension out of the UK via QROPS into an RRSP in Canada, every case has to be looked at on its own merits and it is not suitable on every occasion.

If your intentions are to stay in Canada, a QROPS transfer can very well be the right course of action for you to take. What also has to be looked at are the downsides of leaving a pension in the U.K if your intentions are to retire in Canada.

1) once you start drawing a uk pension it will then be paid out in UK pounds, either into a UK bank account or into your Canadian account. People that have retired over the last few years in Canada, and currently receive a UK pension, due to the drop in the exchange rate, have seen their pension incomes decrease significantly.The whole idea of a pension is to receive a stable income in retirement.If you are at the mercy of exchange rates every month this will not be the case. Of course it could work in reverse, but there will be many people on this site that will have seen their pension income decrease, purely through this reason, which is something that is totally out of their control. With the pension being moved to Canada and in an RRSP, at retirement you will then receive your pension income in CAD and will have no currency fluctuation risk.

2) With most final salary schemes in the U.K, many people are unaware that on death in retirement, their spouse could lose up to Half of their pension income overnight. On death within an RRSP or RIF in Canada,the full value of the pension fund would roll over to their spouse Tax Free. Again this is a major difference between UK pensions and the Canadian RRSP.

In regards to schemes like the NHS which are final salary schemes, you are quite right to say these have to be looked at with great care before deciding on moving these types of schemes out of the U.K.

However, many people again do not realise what happens to these schemes once they leave them.

Once you leave a scheme like this your pension becomes deferred ( frozen ) at the time from which you left. therefore your pension income will be generally calculated based on the amount of years in the scheme and your final salary on leaving. The pension will grow in deferment by roughly 2-4% per annum (this potentially will now be less due to the govt altering public sector pensions). Public sector schemes have recently been affected due to the Government changing the rules on how these pensions will grow in deferment. they have changed the growth index from RPI (retail price index ) to CPI ( consumer price index ). This may not sound a massive change, but historically CPI has always been a lesser figure compared to that of RPI. Therefore going forward the government is looking to make huge cuts on the growth of public sector pensions,in turn making big savings for the government, with many people now facing the prospect of a smaller pensions. A study made by the Pensions Policy Institute,stated that these changes made by the government to public sector pensions have already cut the value of a typical employees pension by 25% (information from F.T .com )

Final salary schemes do provide many benefits which include the provision for a guaranteed income for life determined by the factors that have been previously mentioned, whilst also providing a spouses pension on death.Also a tax free lump sum on retirement could also be taken.

Within Canada you can also place your pension funds in products that will provide a guaranteed income for life , like a final salary scheme can offer, but will also give you full control over your invested funds ( unlike a final salary scheme ) You have full control over your pension fund. These pension products will also provide your spouse with the full value of the remaining pension,on death, rolled over to them tax free, again something a final salary scheme will not offer.

Ultimately it is up to the individual to make the decision on whether they want their pension funds in Canada, but as you quite rightly stated spoons1961, people have to make an informed decision based on the facts on whether it is right to leave a pension in the UK if you now reside in Canada.

As an advisor for over twelve years in the U.K , and a fully qualified adviser for nearly 4 years in Canada, I made the decision to move all of my bank pensions via QROPS to Canada , as well as my wifes NHS pension , as I felt the advantages of these pension funds being in an RRSP far outweighed the negatives in regards to leaving those pension funds in the U.K .

Again , everybodys circumstances are different, and your decision has been to leave your funds in the U.K, but it certainly isnt the wrong choice to move these to Canada, whether they are NHS final salary schemes or not, it is just your personal choice.

Last edited by mjwalker007; Jan 29th 2011 at 1:24 am.
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Old Jan 29th 2011, 7:30 pm
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Default Re: UK Pension Transfer to Canada

Hi MJWALKER007
You sound like you know what you are talking about, a lot of sound advice there.My wifes situation is she has been drawing her NHS. pension for 9 years now in the U/K. When we move to Canada it will be paid there but obviously at the mercy of the exchange rate.Would it be worthwhile or indeed possible to transfer her pension to anything as secure as the NHS in Canada. I dont think she will like me saying this but she will be 65 in sept if that makes any difference and it is a final salary pension.
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Old Jan 29th 2011, 7:42 pm
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Default Re: UK Pension Transfer to Canada

Originally Posted by big ron
Hi MJWALKER007
You sound like you know what you are talking about, a lot of sound advice there.My wifes situation is she has been drawing her NHS. pension for 9 years now in the U/K. When we move to Canada it will be paid there but obviously at the mercy of the exchange rate.Would it be worthwhile or indeed possible to transfer her pension to anything as secure as the NHS in Canada. I dont think she will like me saying this but she will be 65 in sept if that makes any difference and it is a final salary pension.
I don't believe you can transfer a pension after you have started drawing it, but I may be proved wrong again.
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Old Jan 29th 2011, 7:51 pm
  #148  
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Default Re: UK Pension Transfer to Canada

Originally Posted by big ron
Hi MJWALKER007
You sound like you know what you are talking about, a lot of sound advice there.My wifes situation is she has been drawing her NHS. pension for 9 years now in the U/K. When we move to Canada it will be paid there but obviously at the mercy of the exchange rate.Would it be worthwhile or indeed possible to transfer her pension to anything as secure as the NHS in Canada. I dont think she will like me saying this but she will be 65 in sept if that makes any difference and it is a final salary pension.
Hi BigRon

Unfortunately , as Tangram has rightly pointed out, once you start drawing the pension from the UK , it then cannot be transferred over via QROPS and has to continue to be paid by the NHS in GBP.

This is why when living in a different country to where your pension income is going to be paid, can cause you a big problem in retirement due to exchange rate fluctuations that you will have no control over.

Therefore transferring your UK pension to a Canadian RRSP can make very good sense.
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Old Jan 29th 2011, 7:56 pm
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Default Re: UK Pension Transfer to Canada

Originally Posted by mjwalker007
as Tangram has rightly pointed out,
Ah those years as a NatWest FA paid off.
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Old Jan 29th 2011, 8:35 pm
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Default Re: UK Pension Transfer to Canada

Cheers guys but I am still coming later this year crap exchange rate or not.I want to see my g/children grow up,Thanks again for the info.
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