Jeevan

Hi all, I'm hoping to get some further clarification on this matter. I've been working in the UK for just under 2 years. I will make my way back to Canada within the next 3-4 years (definitely don't see myself working here for total of 10 years). My option (before the 2 year working deadline) is to opt out and refund my pension contributions as I believe I cannot transfer it to Canada. Does anyone have an alternative idea/option? Would be grateful for any advice, thanks.

Tumbling_Dice

Are you talking about auto enrollment? There are many issues there in terms of your own personal circumstances and plans. Some general thoughts: currently, and this could change, HMRC seem to have put a stop to QROPS in Canada so any UK pension will have to stay there. Depending on how long you are in the UK the matching employer contribution will be of value and you may end up going back. Also, if you are close to 55, you can access money in your pension.
Like I say, a few thoughts. Happy to expand on it if you can provide some more detail.

Jeevan

Yea sure thanks for the reply. I am a canadian citizen (32 years old) currently working in Northamptonshire as a GP trainee. I started working here about 2 years ago and will likely work for another 3-4 years. I am planning to be back in Toronto by 2022 (so would've worked in the UK for total of 6 years). Correct me if I'm wrong but do I need to work here for 10 years to qualify for pensions benefits? If that is the case, I though I should maybe opt out/refund if I am not able to transfer the benefit (as with the new role regarding QROPS). Would be great to hear what your thought are, thanks.

bats

Are you talking about the State Pension?

Jeevan

No, I'm referring to the defined benefit pension scheme.

christmasoompa

For the UK I assume rather than Canada? I'll move your thread to the UK forum where the good folks there will hopefully be able to help you. If I've misunderstood which country you are asking about, please just say and somebody will move it back.

Jeevan

I'm referring to the transfer of my pension scheme from UK to Canada, thanks.

Siouxie

There are no QROPS that are approved by HMRC in Canada at present and as such, you would not be able to transfer your pension, as far as I am aware. All Canadian QROPS have been removed from HMRC's list for 2017/18.

HKG3

Are you talking about the NHS pension scheme?

I would suggest you to stay in the defined benefit pension scheme - not many of them around these days.

You should also be thinking of getting British Citizenship before returning to Canada.

Jeevan

Yes, it is the NHS pension scheme. I'll probably be eligible to apply for British citizenship before leaving back to Canada. If I was to keep the DB pension scheme, what options will I have when I leave back to Canada? Only reason I ask is that I wasn't aware of other options. It appears that NHS pension fund cannot be transferred easily to other pension schemes (I do need to clarify this though). And if I go beyond the 2 years of working in the UK (which will be Aug, 2018), I will not be able to opt out/refund. Any thoughts/ideas would be helpful, thanks.

Tumbling_Dice

The one sure thing is that you cannot currently move it to Canada. DB accrued benefits can be transferred in theory to another personal pension in the UK. An adviser would need to get a cash equivalent transfer value and recommend appropriately. I doubt you would find an adviser willing to do this as the NHS scheme is creme de la crème. However, you circumstances may enable it to stack up as suitable advice. You could then hang fire and see if QROPS comes back or wait till 55 and withdraw.

If you do accrue benefits and leave it they would be frozen until eligible retirement date. If the pension is small enough they may, and I stress may, offer a commutation of benefits. You would need to check specifics with the NHS pension administrator.

durham_lad

I have 2 DB pensions from my time working in the UK. I emigrated to the USA when I was 32 so these schemes had only 6 years contributions in each one. I kept in contact over the years and now in my 60’s I am receiving just over £10k/year from them and one of them has a cost of living adjustment each year. I don’t know what options the NHS scheme has but if you have been in it for over 5 years the minimum will be to have it frozen until you are of pensionable age.

HKG3

If I am you, I would stay in the NHS pension scheme. You will become a deferred member once you left the NHS. You will need to tell the NHS pension office of your new address in Canada so that they can send you annual pension statements.

With regards to British Citizenship, the OP should apply for British Citizenship before he leaves the UK if he qualifies for it. Once he naturalised in the UK as a British Citizen, he can pass on his British Citizenship to his children born outside of the UK.

Jeevan

Thanks for all your replies. I'm definitely rethinking this opting out option after reading your comments. Is there a minimum amount of years an individual must have worked or contributed to the pension scheme in order to qualify for it? I will definitely be here for total of 5 years but certainly less than 10 years.

durham_lad

5 years used to be the line to cross for DB pension schemes. Before 5 years you used to be able to withdraw all your contributions and pay income tax plus a 10% penalty, after 5 years you became vested. Not sure of the rules these days regarding DB plans.