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Bringing UK Pension to U.S.

Bringing UK Pension to U.S.

Old May 14th 2017, 5:25 pm
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Default Bringing UK Pension to U.S.

I have a private pension in the UK which I need to transfer to the U.S., can anyone recommend an honest and trustworthy outfit or individual with the
expertise to do this.

The pension company in the UK say that they will only allow the transfer if a financial adviser is involved and that the U.S. pension or annuity provider is a member of the QROPS scheme.

Given those restrictions, I'm looking for someone experienced in this kind of transfer.

Thank you!
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Old May 14th 2017, 5:29 pm
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Default Re: Bringing UK Pension to U.S.

This is impossible under US law (it is doubtful if it s permitted any longer from a UK perspective either). Why cannot the investments stay in a UK plan?
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Old May 14th 2017, 5:31 pm
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Default Re: Bringing UK Pension to U.S.

Cook_Co is correct.

The problem is that the UK sees the pension funds as absolutely locked up until retirement, whereas other countries permit access to those funds under certain circumstances. This is why the number of ROPS/QROPS has declined significantly as the number of investment managers willing and able to guarantee that funds will be inaccessible until retirement has declined. US Law effectively precludes the existence of a ROPS.

The is on-line chatter about using Maltese ROPS, but the advisability of that from a US tax perspective is highly questionable, and the fees with Maltese investment managers are, from what I have heard, quite high.

Even if it was possible, IMO, it would be very ill-advised.

Last edited by Pulaski; May 14th 2017 at 5:45 pm.
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Old May 14th 2017, 6:26 pm
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Default Re: Bringing UK Pension to U.S.

My UK pension provider is saying as I am 75 this month, I have to either take the cash or transfer it to an annuity or a drawdown (IRA). The former is not tax efficient and with regard to the latter two, no pension provider in the UK will do this unless I'm a UK resident. The company the pension is with now more or less advised me not to transfer the fund to their products as they do not specialize in that area and I would likely get a better deal if I shop elsewhere.

Does anyone have any experience with this gentleman?:

https://ukpensiontransfer.com/blog/

Last edited by zany; May 14th 2017 at 6:54 pm.
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Old May 14th 2017, 8:03 pm
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Default Re: Bringing UK Pension to U.S.

Originally Posted by zany View Post
My UK pension provider is saying as I am 75 this month, I have to either take the cash or transfer it to an annuity or a drawdown (IRA). The former is not tax efficient and with regard to the latter two, no pension provider in the UK will do this unless I'm a UK resident. The company the pension is with now more or less advised me not to transfer the fund to their products as they do not specialize in that area and I would likely get a better deal if I shop elsewhere. ....
With all due respect at your age there aren't many options. Broadly speaking the tax concessions for pensions are designed to encourage people to save during their working life, so that they can have income which will be taxed during their retirement.

At this point I am unclear as to what your goals are, but no "pension" type investment is going to let you defer your income drawings indefinitely. In the US a 401k, which is the closest parallel to a British private pension, mandates drawings from the age of 70½.
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Old May 14th 2017, 9:19 pm
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Default Re: Bringing UK Pension to U.S.

Basically, and sorry if I have not been clear, my UK pension provider is willing to transfer the whole pot, untaxed from the UK, as long as this end the company offering an annuity or IRA is a member of the QUROPS scheme. They assure me that they have done this before to America.

25% of my fund to go into a U.S. annuity or IRA (tax free) and the 75% balance into the another annuity or IRA which will be taxed in the U.S.

Does this help or are we back to where we started?

Last edited by zany; May 14th 2017 at 9:27 pm.
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Old May 16th 2017, 12:58 am
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Default Re: Bringing UK Pension to U.S.

There are no easy answers to this one.

My suggestion... transfer the funds to a UK based drawdown pensions account. Make withdrawals as and when needed (although that income will be taxable by the IRS).

It's not trivial but it is almost certainly doable and legal.

This does give you some flexibility over the timing of foreign exchange transactions which you may consider a plus.
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Old May 16th 2017, 1:11 am
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Default Re: Bringing UK Pension to U.S.

Right - the only thing is, my current fund is with a UK company that says my policy can't be transferred to a UK based drawdown pensions account - only an annuity or cash. And all the annuity companies say I must live in the UK to do that.
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Old May 16th 2017, 1:31 am
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Default Re: Bringing UK Pension to U.S.

Originally Posted by zany View Post
Basically, and sorry if I have not been clear, my UK pension provider is willing to transfer the whole pot, untaxed from the UK, as long as this end the company offering an annuity or IRA is a member of the QUROPS scheme. They assure me that they have done this before to America.

25% of my fund to go into a U.S. annuity or IRA (tax free) and the 75% balance into the another annuity or IRA which will be taxed in the U.S.

Does this help or are we back to where we started?
So have you talked to a US annuity provider or investment manager? The usual problem people face is getting the OK to remove funds from the UK (because of the QROPS issue), but in your case it sounds like you can get the money out, you just need somewhere to put it.

Right?
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Old May 16th 2017, 2:07 am
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Default Re: Bringing UK Pension to U.S.

Are you sure?

I was in a not so different situation. I had a pensions account with the Pru. They couldn't (wouldn't) transfer it to a drawdown with the Pru. But I did transfer it to a drawdown with another UK Pensions company.

The wrinkles were (1) they would only effect the transfer via a Financial Adviser and (2) it was hard to find a Financial Adviser that was licensed to advise a non-resident.

It all took a few months but it worked out well in the end.
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Old May 16th 2017, 3:08 am
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Default Re: Bringing UK Pension to U.S.

I was in the same position too, I had 4 pensions in UK and none of them would transfer them to a drawdown in the same company, in fact a couple of them didn't have drawdowns to offer even if I had been in UK. But I have transferred all of them to a drawdown with another UK pensions company and I did through a company here in US.
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Old May 16th 2017, 7:48 am
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Default Re: Bringing UK Pension to U.S.

Originally Posted by becks_r View Post
I was in the same position too, I had 4 pensions in UK and none of them would transfer them to a drawdown in the same company, in fact a couple of them didn't have drawdowns to offer even if I had been in UK. But I have transferred all of them to a drawdown with another UK pensions company and I did through a company here in US.
The nuisance to this is that in addition to any existing Form 8938 and Form FinCEN 114 reporting, you have now created a foreign grantor trust; requiring annual filing of Form 3520-A (by 15 March) and Form 3520 (by 15 April). This will add hugely to the thrill and risk of annual IRS reporting.
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Old May 23rd 2017, 8:44 am
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Default Re: Bringing UK Pension to U.S.

I am curious about something similar, Is it possible to transfer a British Military pension to a US 401K? any Ex Army in here done that? or know anything about it?
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Old May 23rd 2017, 12:42 pm
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Default Re: Bringing UK Pension to U.S.

Originally Posted by PaddyRanger View Post
I am curious about something similar, Is it possible to transfer a British Military pension to a US 401K? any Ex Army in here done that? or know anything about it?
I sincerely doubt it is possible, but in any case it would be extremely ill-advised to do so under almost all circumstances*.

Anyone who gives up a government-backed pension in favor of putting funds in the stock market, or even government bonds, is IMO taking a reckless gamble. Given the opportunity I would happily swap a large chunk of my pension investments for a government-backed pension - so the exact opposite of what you are asking about.

* I have heard of some people recently being offered almost absurd buyouts - at 30-40 years of the annual pension amount, which might be a good deal.
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Old May 24th 2017, 5:59 am
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Default Re: Bringing UK Pension to U.S.

Quote:
Originally Posted by PaddyRanger View Post
I am curious about something similar, Is it possible to transfer a British Military pension to a US 401K? any Ex Army in here done that? or know anything about it?
I sincerely doubt it is possible, but in any case it would be extremely ill-advised to do so under almost all circumstances*.

Anyone who gives up a government-backed pension in favor of putting funds in the stock market, or even government bonds, is IMO taking a reckless gamble. Given the opportunity I would happily swap a large chunk of my pension investments for a government-backed pension - so the exact opposite of what you are asking about.

* I have heard of some people recently being offered almost absurd buyouts - at 30-40 years of the annual pension amount, which might be a good deal.

Thanks Pulaski My thinking was if something should happen to me, my wife would get it, access to my 401K but the British Military Pension would be lost to her?
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