mjwalker007

Thats right JonboyE, its important not to get mixed up between what are occupational schemes and what are Personal Pension Plans.

As you have now mentioned , Personal Pension Plans are generally Money purchase scheme (i.e what you get depends on the performance of the fund !) whereas generally nowadays many Occupational schemes are also going down the money purchase route, as it places less responsibility on the company too pay out a set pension income in the future .

The Final salary scheme is based on salary and years of service.Therefore the company will know what it will have to pay out in the future ! therefore many companies do not now offer this type of pension as it creates an obligation for them !

mjwalker007

Hi Ikrananka,

I would think the reason the transfer value is lower than the actual fund value is because it is a personal pension and not an occupational scheme. When I did pension transfers in the U.K for my clients , some companies charge a penalty for moving the pension away from them within a specific period of time. Having said that we would always look at the company to see what charges they were making within the pension, as it still may of been better to move the pension to a different provider, as there charges were lower and would have less of an impact on the fund value in the long term ! not all pension providers charge the same for providing the pension !!!!

Regarding knowing of an advisor in Calgary, again as mentioned on previous threads, there aren't that many advisors that know about U.K pension transfers,are able to do these transfers, or know what to do !!! As witnessed by the P.Ms that I am receiving from Ex Pats all across the country !!

I am looking into the possibility of getting licensed in other provinces (you are only able to advise in your own province, unless you get licensed in another province) and this is something I am looking to do in the shorter term. Therefore hopefully soon , if you did need to speak to someone, I may be able to help you.

PensionPete

Regarding pension transfers, one thing to keep in mind is that not every Canadian institution has the same approved plan. There are some major differences and advantages for some plans versus others. If you want to know more feel free to pm me.

P

chigirl

quick question, if you transfer over your uk pensions and put them in to a canadian retirement savings plan are you able to withdraw part of the money? i remember someone telling me that you had to wait for 5yrs otherwise it would cause tax implications. does anyone know if this is correct?

many thanks

Celia Medley

Hi,

I am trying to get hold of a tax advisor at the moment to check this out, because the retirement plan I chose over here which was BMO Nesbit Burns sent me the following email:

According to our Trust Department, From a UK perspective, you must not have been a tax resident in the UK in the year in which the transfer is made or in any of the previous five tax years. If you transfer funds during this time frame you will be open to an unauthorized payment charge of up to 55%. We(the financial institution) are not required to withhold the taxes, but merely to report the events as they have occured to Inland Revenue. Inland Revenue will then contact you and determine the type of event that has occured and whether or not is will be taxable from their perspective.

I will let you know what happens..... watch this space.

PensionPete

It depends on what institution you use. All plans are different. There are some that allow for immediate withdrawals of money but keep in mind it is taxable income unless money is being drawn out of an RRSP under the First Time Home Buyers Plan or Life Long Learning program. Too much information to post so pm me if you want more details.

mjwalker007

Hi Chigirl

We touched on this earlier in the post.

The official HMRC line is that you have to have been non resident in the U.K for the last 5 years. Therefore if you have been in Canada for 4 years then move your pension over you could have to wait a further 1 year to be able to access any of the fund.

Officially the company you are moving the funds to in Canada should keep a track of any withdrawls that you make before this 5 Year period. Then as mentioned you would be hit wit a massive tax bill.

In reality though, these companies may not make these checks, but as mentioned 5 years non resident to be on the safe side !

With all of the transfers that I have carried out, I always advise my clients of the 5 year rule as this is an important piece of information.

I liaise with a contact in the QROPS overseas pension department within the HMRC , so I make sure that all the information that I provide is verified with the people that make the rules.

As mentioned you would not want to make a withdrawl and get slapped with a 55% tax charge !

chigirl

hi mark

thanks for taking the time to clarify this point for me. i guess for a lot of expats including myself/husband it's an interesting option and definitely food for thought.

Ramsey

Hi guys,

Thanks for the most informative thread yet.... Just a couple of questions I dont think have been addressed yet:

1) What if you have already been ex-pat for 5 years?... do the QROPS rules still apply? Do I have to transfer to a QROP registered scheme?? (or can I use any tax-free wrapper, for example??)

2) I'm 30 and only have a small pot (Started paying when I was 21 and finished at 24, have since been overseas with no further contributions)... total value will be no more than GBP16K. I have recently settled to Canada permanently... The attraction of transferring is that I will be able to borrow CAD20K tax-free from the RRSP to help fund my first Canadian home... As I have been ex-pat for over 5-years this should be possible straight away... My question is: Is it possible to transfer such a small amount and if it is, will any bank be willing for such a small possible commission???

Any info greatly appreciated!

mjwalker007

Hi Ramsay,

If you have been non resident from the U.K for 5 years, then you would be able to access your money under normal RSP rules immediately without being penalised by the Inland Revenue. You will have to transfer your pension to a QROPS scheme in Canada as your pension provider will almost certainly insist it has to be transferred to a QROPS scheme.

As you have mentioned, one of the benefits of transferring it to an RRSP in Canada is the advantage of being able to withdraw it to use it as deposit on your first home in Canada. If it stayed in the U.K you would not be able to access the pension until you were 55 , and then you could only take 25% of the pension as a lump sum ! So there are big benefits for moving it to Canada.

Although your fund is relatively small, the QROPS scheme's that I access for my clients, will allow this amount to be transferred into their RSP.

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

Mikey B

My financial advisor who is usually a miracle worker is also trying to do this from sun life for me and its wall after wall, been trying for 4 months now to get info and details etc, its a pain in the ass.

Ramsey

Thanks for your advice!!

Ramsey

Any of the posters that used BMO Nesbit Burns sucessfully... do you have a contact name for the advisor that you used.... The one that called me didn't really have a clue about UK transfers!!

pls. PM me if you do!

Cheers!

Mikey B

Mine managed to find a scheme that works thanks to Pension Pete's advice I passed on however he is with PriMerica

mjwalker007

This sounds along time just to get info and transfer values on the scheme. This kind of information can normally be received within a month (based on the postal system). Is your advisor from Canada or is he an Ex Pat ?