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Transferring UK pension to US 401K!

Transferring UK pension to US 401K!

Old Feb 7th 2012, 11:56 pm
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Default Successfully transferring UK pension to US 401K??

Hi,

Does anyone have any positive experience with transferring their pension from the United Kingdom to an America 401K scheme?

I'm in the process of trying to succeed with this!

I am British and my wife is American, we live in Washington State.

When speaking with my UK pension broker they have explained that in order to transfer my plan to the US I have to find a Qualifying Recognized Overseas Pension Scheme or QROPS.

My wife's 401K is with Fidelity Investment and having spoken with them I've been told they are not able to oblige, citing UK/US policy and exchange rates being problematic.

I am positive this CAN be achieved but the method to this madness is something I have not figured out yet. Unlike the US, the UK will not permit policy holders to distribute part or all of their funds (even with high penalties) until retirement age, so its not as if I can even liquidate it and then transfer the funds overseas.

Nor will, from what I can gather, existing US 401K providers allow a husband to incorporate theirs with a wife's current policy.

Can anyone provide some hope here? - internet searches do provide sites with companies allegedly being able to help but they seem less than legally legitimate

Many thanks,

P
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Old Feb 8th 2012, 12:47 am
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Default Re: Successfully transferring UK pension to US 401K??

Originally Posted by True.2.form View Post
Hi,

Does anyone have any positive experience with transferring their pension from the United Kingdom to an America 401K scheme?

I'm in the process of trying to succeed with this!

I am British and my wife is American, we live in Washington State.

When speaking with my UK pension broker they have explained that in order to transfer my plan to the US I have to find a Qualifying Recognized Overseas Pension Scheme or QROPS.

My wife's 401K is with Fidelity Investment and having spoken with them I've been told they are not able to oblige, citing UK/US policy and exchange rates being problematic.

I am positive this CAN be achieved but the method to this madness is something I have not figured out yet. Unlike the US, the UK will not permit policy holders to distribute part or all of their funds (even with high penalties) until retirement age, so its not as if I can even liquidate it and then transfer the funds overseas.

Nor will, from what I can gather, existing US 401K providers allow a husband to incorporate theirs with a wife's current policy.

Can anyone provide some hope here? - internet searches do provide sites with companies allegedly being able to help but they seem less than legally legitimate

Many thanks,

P
Husband has looked into this numerous times, since we, too, have pension plans in the UK.

He has never been able to find a way/and or US company who can assist with this.
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Old Feb 8th 2012, 12:53 am
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Default Re: Transferring UK pension to US 401K!

Originally Posted by True.2.form View Post
When speaking with my UK pension broker they have explained that in order to transfer my plan to the US I have to find a Qualifying Recognized Overseas Pension Scheme or QROPS.
And there's the problem. You won't find one.

Good luck though. It's been the holy grail on numerous past posts...so if you do figure it out, I'm sure a lot of other people will be very grateful.
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Old Feb 8th 2012, 2:02 am
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Default Re: Transferring UK pension to US 401K!

It can't be done - 401k plans are set up under the US tax code as a retirement savings plan with deferred taxation - contributions to them come from pre-tax income (and are subject to an annual limit), income generated from the investments in the plan is not taxed at the time that it is accrued, and withdrawals from the plan after retirement age are taxed as ordinary income.

There is no provision for injecting lump sums of money from any source into a 401k plan.
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Old Feb 8th 2012, 2:19 am
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Default Re: Transferring UK pension to US 401K!

I'll just reiterate the other posts.

You cannot transfer a UK pension to a US 401k as the IRS does not recognize QROPS

Last edited by nun; Feb 8th 2012 at 2:22 am.
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Old Feb 8th 2012, 5:31 pm
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Default Re: Transferring UK pension to US 401K!

Originally Posted by nun View Post
I'll just reiterate the other posts.

You cannot transfer a UK pension to a US 401k as the IRS does not recognize QROPS
Thank you to everyone who responded to my above question, I'm smiling, but with gritted teeth over this predicament.

To talk with and hear the responses from my UK pension broker regarding transferring to another scheme overseas you'd think they do it daily and with complete success. Oh yes sir, simply find a fund which is QROPS approved, we will liaise with them and in around a month to six weeks it can be facilitated.

I will talk with them tomorrow and see if they can actually provide me with the name of a firm they HAVE exchanged to the US.......

Anyhow. Again thanks.
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Old Feb 8th 2012, 6:44 pm
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Default Re: Transferring UK pension to US 401K!

Why do you want to transfer the pension in the first place? The UK/US tax treaty will allow you to keep all gains tax deferred until you take income.

I will be in the reverse position to you of having US retirement accounts and living in the UK eventually. I have never considered moving them to the UK because there isn't a mechanism for doing it and also because I don't seen the need.

Last edited by nun; Feb 8th 2012 at 6:46 pm.
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Old Feb 8th 2012, 6:48 pm
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Default Re: Transferring UK pension to US 401K!

Originally Posted by md95065 View Post
It can't be done - 401k plans are set up under the US tax code as a retirement savings plan with deferred taxation - contributions to them come from pre-tax income (and are subject to an annual limit), income generated from the investments in the plan is not taxed at the time that it is accrued, and withdrawals from the plan after retirement age are taxed as ordinary income.

There is no provision for injecting lump sums of money from any source into a 401k plan.
401k is only one kind of tax-advantaged retirement plan. Moving lump sum accumulations from an old employer's plan is usually done into a rollover IRA. Doesn't work from a British (i.e. foreign) plan though, as others have said.
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Old Feb 24th 2012, 12:19 am
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Default Re: Transferring UK pension to US 401K!

Originally Posted by nun View Post
Why do you want to transfer the pension in the first place? The UK/US tax treaty will allow you to keep all gains tax deferred until you take income.

I will be in the reverse position to you of having US retirement accounts and living in the UK eventually. I have never considered moving them to the UK because there isn't a mechanism for doing it and also because I don't seen the need.
Hi,

I want to transfer the funds because I want to liquidate the pension, with penalties of course, as the money is needed.
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Old Feb 24th 2012, 2:11 am
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Default Re: Transferring UK pension to US 401K!

Originally Posted by True.2.form View Post
Hi,

I want to transfer the funds because I want to liquidate the pension, with penalties of course, as the money is needed.
If you need the money why would you want to transfer it to a US retirement account with it's penalties and limits on withdrawals? even if you could.
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Old Feb 25th 2012, 5:44 pm
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Default Re: Transferring UK pension to US 401K!

Originally Posted by nun View Post
If you need the money why would you want to transfer it to a US retirement account with it's penalties and limits on withdrawals? even if you could.
Because currently I cannot access the funds in the UK, if they remain there, until I am 55 years of age.
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Old Mar 9th 2012, 3:19 pm
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Default Re: Transferring UK pension to US 401K!

For what it is worth I received an offer that is being made by a prior employer of an enhanced Transfer Value. So I call up the advisers and mention I am no longer UK resident and that is where they go errrrrrrr.

Can not be an uncommon situation with the number of Expats.
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Old Mar 9th 2012, 5:06 pm
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Default Re: Transferring UK pension to US 401K!

Originally Posted by Boiler View Post
For what it is worth I received an offer that is being made by a prior employer of an enhanced Transfer Value. So I call up the advisers and mention I am no longer UK resident and that is where they go errrrrrrr.

Can not be an uncommon situation with the number of Expats.
There are schemes that will do a QROP for you to a place other than the US and put your pension in an "insurance wrapper" that will protect it form US taxation until you make distributions. You may be protecting your money form the IRS, but the company holding your money will charge you big fees. And anyway the UK/US tax treaty does the same thing for free.

If you are moving to the US then for everyone except the very rich or those with access to very sophisticated tax planning it's generally best to leave UK pensions where they are. There is a treaty in place to shelter gains inside UK pension funds from US tax and avoid double taxation of income.
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Old Mar 9th 2012, 7:13 pm
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Default Re: Transferring UK pension to US 401K!

Originally Posted by nun View Post
There are schemes that will do a QROP for you to a place other than the US and put your pension in an "insurance wrapper" that will protect it form US taxation until you make distributions. You may be protecting your money form the IRS, but the company holding your money will charge you big fees. And anyway the UK/US tax treaty does the same thing for free.

If you are moving to the US then for everyone except the very rich or those with access to very sophisticated tax planning it's generally best to leave UK pensions where they are. There is a treaty in place to shelter gains inside UK pension funds from US tax and avoid double taxation of income.
Not interested in the big fees, they are trying to buy on my final salary, and the offer looks attractive.
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Old Aug 8th 2012, 3:17 pm
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Default Re: Successfully transferring UK pension to US 401K??

Their is no reasonable explanation why a UK Ex Pat should not be able to transfer their Pension Investments. The Inland Revenue will allow it tax free but the IRS puts up an illogical barrier by saying UK Pensions Investments do not qualify.Yet investments in a 401k are made exactly the same as into a British Pension.

I would like the British Ex Pat web site to organize a petition on our behalf. My main reason for still wishing to transfer my investments is so that I can get away from the outrageous charges British brokers make for a trade. 5c a share one thousand equals a $100 in and out! Charles Schwab USA $16.

My Pension is held in a SIPP ios anyone doing any better on commissions?
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