Big Face

Thanks Bevs...probably an issue my end but all good now....

Cheers

plent2d

Thanks for that..(whoever you are?)..i looked at ChCh4me's profile but it doesn't say exactly where in NZ he is?

chc4me

Thanks plent2d. The clue is in the name ... chch 4 me ..... Christchurch! Having said that I have clients all over the country (a few in other parts of the world too). With technology the way it is, particularly Skype, face to face meetings and discussions are pretty easy these days.

You can Private Message me if you wish to discuss further.

eddie 328

Hi all,
Need some help re our situation>>>
Came to NZ end of 2008, my police pension came across in 2009 put into a QROPS scheme, being looked after by Perpetual or Van eyk now.
Anyhow, we were advised that after 5 u.k tax years I could withdraw upto 40% with rest available when I reached 55yrs.
Our 5yrs being up on 07/04/14 we decided that I would withdraw an amount ( not the 40%) for me to begin early retirement with obviously the remainder available at 55YRS.
Yesterday I emailed our advisor to clarify the new tax position his response was vague to say the least..
I feel as if i am playing russian roulette as to whether i will be hit with massive tax bill if I make this withdrawl .
Can you please explain this position and worst/best case scenarios. also this voluntary 15% tax would that affect me ?
chc4me help
I feel totally at a loss

BEVS

Our funds are with Perpetual , now Van Eyk.

I am less than impressed with the total lack of communication from the 'advisor'. Our previous one was great but she left however she could also be a bit hit and miss.

I feel the same about this. It is like playing russian roulette.

I've been here 10 years & am rather over 55. My OH turns 55 this September.
I'd like to make a total withdrawal TBH and place the funds where I can understand them better.

We will be hit by the retrospective tax. I'm not sure about you though. The 4 year exemption thing might come into play .

Hopeful Dai will be along soon.

eddie 328

Hi Bevs,
Thanks for the reply... we cannot believe what is happening at the mo... i was looking to retire this year but now I have no idea what the hell to do.We feel the same in that we want to take the bloody lot out from them and put it somewhere that we have more control on.
Hopefully Dai can help us

BEVS

I tend to agree. That's my gut feeling anyway. Get the money out and place it elsewhere .

In all the years of having bits of pension in the UK , I never felt anything other than a bit secure for us paying into them. Happy to save for our adage in that way . I'll be honest. I wish we had left them there.

Since bringing them over we've had mixed messages about what can and cannot be done and even part of the funds frozen because of some sort of inside dealing or other. I'm not even sure they really gain better ground than , say, a term deposit which we could do ourselves.

My understanding of mine was that I could take the lot out if I so wished & so could Mr BEVS.

If there is a tax on that on top of the retrospective tax for having them in the first place , then I just don't know why I don't just hand over our pension savings direct to the NZ IRD. I already paid tax on the money when I was earning it !

eddie 328

HI BEVS YES OUR THOUGHTS EXACTLY THE TERM DEPOSIT IS SOUNDING A VERY GOOD OPTION.
HOPEFULLY CHC4ME CAN IMPART SOME OF HIS KNOWLEDGE FOR MY STATE OF AFFAIRS.

chc4me

Hi Eddie,
Thanks for your questions. As an Authorised Financial Adviser, I have certain legal obligations which restricts providing advice without following certain steps and having a clear understanding of a persons situation. I can however provide general facts and information, but not specific advice.

To answer your question, we need to take a quick look at the history of UK Pensions and QROPS rules.

QROPS started on 1 April 2006. The rules at that time were VERY flexible and it was possible to make a transfer of a UK Pension to a NZ QROPS and withdrawal the full amount without penalty.

1 April 2010, the minimum retirement age changed from age 50 to 55. Initially that had no bearing .....

The Perpetual scheme originally had NO minimum retirement age. However the rules within the scheme changed (in approximately 2010). The new rules allowed up to 40% withdrawal before the age of 55, and then 100% withdrawal after age 55.

1 April 2012, Major change for all QROPS schemes, including the one you mention; absolutely NO withdrawals before age 55. Maximum of 30% lump sum withdrawal (plus any growth) and the rest as a regular income.


Ok, now lets look at a person that arrived in 2008 and transferred their pension within the first four years. Providing the person was "Transitional Resident" when they made the transfer, then no tax applies to the transfer (so the 15% Amnesty can be ignored providing the criteria for transitional residency is meet).

If a transfer was made into the scheme under 'the old rules', then the Scheme manager can not apply different rules to that member.

"Some" scheme managers will try to tell you that the UK will charge you a penalty if you withdraw any amount before retirement age, but this does not necessarily apply for transfers made before 1 April 2012.

I hope that helps. I'm sure Bev can give you my contact details or you can Personal message me.

chc4me

A correction is needed here. One of the advantages of a saving into a UK Pension is that you have tax relief on contributions. To say you paid tax on the money when you earned it is not quite right.

Effectively, you saved tax free and it grew tax free. The NZ IRD have given you the opportunity to pay a small amount of tax (on the first 15% of your transfer, that means the other 85% is tax free!!), and the benefit of paying this onetime tax is any withdrawals you make, no further tax.

Sounds like a great deal to me.

If you had of left the funds in the UK, you would pay tax on each and every withdrawal. That includes the initial 25% Pension Commencement Lump Sum and the monthly pension payment - for the rest of your life.

Of course, tax is only one consideration to a Pension transfer. There are pro's and con's for keeping it in the UK or making a transfer.

eddie 328

Hi chc4me,
Thanks very much for your prompt and informative reply..it helped a lot.
You were quite right about the fund manager and your info has helped us to move forward..
Thanks loads
eddie

Welhat1

Am really stuck as to whether to transfer teachers pension to NZ or leave it in the UK (or even if there is still time left to do the transfer). I arrived back in NZ in 2005 and had been contributing to the TPS scheme for 13 yrs and have a transfer value. If I did the transfer myself which would be the best NZ based QROPS to transfer into. I want to retire at age 60 in NZ as my TPS pension would have allowed. Which QROPS is best if I decide to go ahead? I would really be grateful for good advice!

BEVS

Umm.

I was and have always been under the impression that we could now withdraw 100% if we so wished, having popped over the 55yr mark.

Is that not so?

mikehum

Hi CHC4ME
Was wondering if you would be able to answer a question or advise on a possible solution to my situation.
I am currently in NZ on a 3 year work visa and therefore unable to pay into Kiwi saver but my employer is accruing pension contributions for me which are held in their account. This is were it gets a bit tricky in that I do not intend to stay in New Zealand so the contributions will never be paid into a Kiwi saver. I would like to be able to get my hands on this money when I do leave so is there any other fund I could get my employer to pay the contributions to? One of my colleagues who is NZ citizen has been able to 'cash out' I was wondering if I could do the same.

Many thanks in advance

BEVS

As you are not eligible for Kiwisaver you should have opted out.
Your employer should not be paying contributions either.

If your employer has been unwittingly paying employers cont. then they should apply for a refund of that. It is not your money. It belongs to the employer.

If you have made any contributions into Kiwisaver then you can reclaim what you have paid in when you leave.