IamNotaWidget

Hi Dread, thank you so much, I appreciate the info. Yes, due diligence is always key but will add that so far I myself am delighted with the process

mr luvpants

Ill be interested if anyone has participated in the above scheme?

JOHN

dreadsoc

Well folks, the Govt has shafted serving police officers once again - and increased the amount of contributions each officer must now pay into the pension pot - as of April 2012 the pension contributions will rise from 11% to 12.25%...................
...............and that's only the start of the Winsor assassination of police pay and conditions !

Strangely enough, the Civil service, Fire Brigade, NHS, Teachers etc have not had pension contributions increased - probably because if the govt tried to inflict that upon them they would immediately set out to go on strike - but then of course the UK police gave up the right to strike in exchange for the pay and conditions set out and offered through the Edmund Davies review - almost all of which have now been taken away !

Dread - x

OttawaCFP

A QROPS can be a good way to go. It's important to weigh the pros and cons of having a defined benefit pension plan like the police do, versus moving the cash value into a QROPS. But for a lot of people, it makes sense. Just be aware that you can't take money out of the QROPS before retirement age unless you have lived outside of the UK for more than 5 tax years. It's important to consult with a financial professional who has lots of experience in this area.

If anyone wants more information on QROPS, just let me know.

dreadsoc

Hi Ottawa

I see you are a new poster so welcome to BE, and thanks for this input.
Are you able to give an outline of what QROPS entails for the benefit of those folks out there who are not too happy with current pensions?

Transferring a pension is OK providing you check things out very thoroughly and ensure that the transfer will meet your financial needs in the future. However for those who are close to their 30 years service and under national retirement age it probably isn't the way to go as it may mean you have to wait to get access to your pension funds to live on in the meantime. That can add pressure to then needing to find full time employment in the years between retiring from the service and reaching the retirement age, which for some is not the way they necessarily wish to go, and is actually not so easy in the current financial climate. It would not be likely suited to those intending to seek emigration following retirement.

I think many of the folks on here who have transferred from UK police forces to police forces in different parts of the world will be feeling pretty fortunate at the momnent with the Winsor reports looming and dooming- there are some hideous changes coming for police pay and conditions. It certainly would not be the job those transferrees left !!

Dread - x

OttawaCFP

Thanks, Dread.

My knowledge of QROPS is specific to UK pensions transferred to Canada, so these rules may not apply to anyone in other countries.

Essentially, before you have started to collect an income from your pension, you can transfer it into a Qualified Recognized Overseas Pension Scheme. These have been approved by HMRC. You must be a Canadian resident who has not lived in the UK within the last UK tax year (so if you emmigrated after April 5th 2011, you have to wait until April 6th 2012).

To transfer your pension to a QROPS, you must find a financial advisor who works for a financial institution that has been approved by HMRC. I recommend that you do this through someone that has experience in this area (as not many Canadian advisors are familiar with the process and the rules involved). If you do not already know someone with such experience, feel free to contact me. I specialize in this area, and I work for a nation-wide company in which I know other advisors who can help you, if I am not able to help you myself.

The transfer process can be lengthy, so be prepared to wait a few months for it to be completed. The cash value of your pension will be invested in an RRSP, subject to certain rules about withdrawals, if you have lived in the UK within the past 5 tax years. The transfer should not cost you anything, in terms of fees or taxes.

What are some of the advantages of using a QROPS? You can have greater control over your money. You get to choose how the money is invested, so it can suit your own risk tolerance. Your access to the money is also much more flexible than a standard pension. You can make it suit your needs. It's also much easier and less time consuming to correspond with a pension provider within your own country, rather than someone across the ocean, in another time zone.

If you have more than one pension in the UK, or your spouse also has at least one, then you can consolidate your finances by transferring them all to the same financial institution. Subject to certain rules, you can even combine your QROPS RRSP with another RRSP that you already have in Canada.

One of the advantages of QROPS that a lot of people care about is: better estate protection. With a standard pension, if you die, your spouse will only get a portion of the value of your pension. Then when your spouse dies, the pension stops being paid. Your children may recieve nothing. However, with a QROPS, when you die, your spouse can have the entire amount transferred to their name, with no tax consquences. When they die, the remaining money can be left to anyone they like, in their Will. The full amount belongs to you and your family.

There are many other reasons that British Expats choose to use a QROPS, but the only real disadvantage (in comparison to a defined benefits pension) is that there are no guarantees on how long the money will last you. If you do not take proper financial advice, and spend the money too quickly or invest it poorly, you could outlive your money. If this pension will be your ONLY source of income during retirement, and you are a nervous investor, then transferring your defined benefits pension to a QROPS is likely not for you.

I hope this summary was useful!

dreadsoc

Thank you Ottawa - you explained that very well, and I am sure this information will be very useful for some of the coppers who have transferred to police institutions in other parts of the world.

Good point about making sure you get good financial advice before transferring to QROPS and that you don't spend the money too quickly.

Dread - x

ann m

Just for interest's sake, and for anyone thinking of Calgary Police, the CPS officers had to raise their pension input from 10.8% to 13% last year. It bascially cancelled out the payrise.

It's not just the UK that gets squeezed - but on average, I think the CPS officers are generally earning more than UK. Swings and wotsits!

dreadsoc

Looks like the same shxtty things happen to police officers in other places too.

Dread - x

Meow

Much of this is specific to Canada. An adviser does not have to be FSA authoried to advise on a transfer of a UK pension, assuming they have some sort of authorsation in the country they are working from.

There is also more than one disadvantage! To suggest otherwise is disingenuous. It can be expensive, HMRC keeps adding restisttrictions, if you return to the UK you could be subject to significant unauthorised payment charges. They are really only suitable for sophisticated investors with large funds who will not return to the UK to live.

As I have said many times, caveat emptor. Watch out for 'advisors' pushing such arrangements as it benefits them, not the planholder.

OttawaCFP

As when making any important financial decision, make sure you are working with a reputable advisor, who has lots of knowledge and experience in this area, and who you feel comfortable with. You shouldn't feel like they are "pushing" anything on you.

Meow

You really ought to be aware that the five year rule is changing from April this year. It will then become 10 years.

QROPS themselves have hefty charges so hopefully people are being told about those, as well as the potential unauthorised payment charges should their situation change - or even if HMRC changes the rules which is possible.

dreadsoc

A definite message here for anyone thinking of what to do with a UK police pension - check check and check again on everything before you sign away your funds

Dread - x

mjwalker007

With all fairness to the poster, he was specifically talking about UK pension transfers to Canada.

To transfer a UK pension to Canada you have to be an advisor within Canada to do this, this is why advisors who do not operate within Canada, would not be able to transfer a UK pension via QROPS into an RRSP.

There are not high QROPS charges for transferring your pension to Canada. It is quite right to say that in certain jurisdictions around the world the QROPS provider may charge a fee for the transfer. Most certainly with my clients, every single penny that leaves their UK pension fund is invested into their Canadian RRSP. The annual fees that the client would then pay to the fund provider for looking after their funds would be no different to anybody investing within an RRSP in Canada.

As an advisor in Canada that has been helping clients for over 4 years transfer their pension funds via QROPS, I believe in most cases , it is advantageous to transfer your pension funds to Canada, however eveybodys circumstances are different and every case should be look at on its own merits.

As the first pensions I ever transferred to Canada were my own pensions and my wifes NHS scheme, I certainly would not have done this if I did not believe that this would benefit me and my family by having our pension funds in Canada.

Not all advisors are born equal, and as with any industry there will be the good and the bad. To say that any advisor who help clients with QROPS transfers are ''pushing such arrangements as it benefits them , not the planholder..........is very wide of the mark and quite frankly incorrect.

Meow

As you do exactly that you wouldn't say otherwise would you? QED