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-   -   UK Final salary pension transfer (https://britishexpats.com/forum/usa-57/uk-final-salary-pension-transfer-932342/)

MidAtlantic Feb 11th 2021 7:41 pm

Re: UK Final salary pension transfer
 

Originally Posted by Glasgow Girl (Post 12970779)
Tax is due when withdrawn from the SIPP, not upon transfer to a SIPP. It is due upon withdrawal regardless of whether you then transfer the funds to the US. You should continue to declare on FBARs. Some say you also should declare It as a foreign trust, some say you don’t have to do that. I, personally do not declare my SIPP as a foreign trust but do declare it on Form 8938 because it is a lot simpler and there is no definitive guidance on the foreign trust requirement.

I take exactly the same approach.

ncameron99 Feb 25th 2021 7:44 pm

Re: UK Final salary pension transfer
 
Glasgow Girl

I would also like the details of a trustworthy independent pension adviser for those with UK-based pensions who have moved to the UK. I've spent two years talking to two different advisers in turn, and narrowly got taken to the cleaners by one lot - based in the Caribbean. My current guy I believe to be honest, but I'm not sure he knows what he so doing. It's so difficult to find any adviser who will even speak to me, as they are terrified of being taken to task by the FSA in the UK.
I would have DM'd you, but I'm not allowed as I only joined today. If you are happy to pass the information on maybe you could DM me...

Glasgow Girl Feb 25th 2021 10:07 pm

Re: UK Final salary pension transfer
 
@ncameron99, Sent you a PM

geak Feb 27th 2021 8:48 pm

Re: UK Final salary pension transfer
 
I completed transferring into SIPP late last year. I live in US since 1999 and had 4 pensions in the UK, one of which was defined benefit.

When it came close to retirement age, I received four invitations to take distribution. It should be simple for UK resident and citizen, but a lot of more work and new learnings for US resident and citizen. I deferred all of them for a year.

Started to work with US financial advisors for UK pension consolidation after the wake up call. Interactions with the first one was intermittent. He was adamant that defined benefit cannot be transferred and only the other three can. At that time, I started to work with the second advisor. It is a team and things started to move - meetings, emails, phone calls, phone interviews and discharge forms with pension schemes one by one.

UK regulated advise was required to move defined benefit pension for a fee. UK advisor was so meticulous and questioned all retirement expenses from Christmas gifts to annual TV license fee which the US does not have. The outcome was a beautifully plotted 2K GBP worth of curve showing I was far better off by transferring out of the defined benefit system which is like a mini social security.

A recommendation was made and transfer to SIPP completed. It took about a year to complete through the pandemic. SIPP is UK based with SEC regulated US intermediate. A sense of relief dealing with one consolidated account and one US tax reporting.

nun Feb 27th 2021 9:22 pm

Re: UK Final salary pension transfer
 

Originally Posted by geak (Post 12978190)
I completed transferring into SIPP late last year. I live in US since 1999 and had 4 pensions in the UK, one of which was defined benefit.

When it came close to retirement age, I received four invitations to take distribution. It should be simple for UK resident and citizen, but a lot of more work and new learnings for US resident and citizen. I deferred all of them for a year.

Started to work with US financial advisors for UK pension consolidation after the wake up call. Interactions with the first one was intermittent. He was adamant that defined benefit cannot be transferred and only the other three can. At that time, I started to work with the second advisor. It is a team and things started to move - meetings, emails, phone calls, phone interviews and discharge forms with pension schemes one by one.

UK regulated advise was required to move defined benefit pension for a fee. UK advisor was so meticulous and questioned all retirement expenses from Christmas gifts to annual TV license fee which the US does not have. The outcome was a beautifully plotted 2K GBP worth of curve showing I was far better off by transferring out of the defined benefit system which is like a mini social security.

A recommendation was made and transfer to SIPP completed. It took about a year to complete through the pandemic. SIPP is UK based with SEC regulated US intermediate. A sense of relief dealing with one consolidated account and one US tax reporting.

Did you have any difficulty transferring to the SIPP because of you rUS tax status and the potential reporting issues for the UK institution? Or has that died down now? Also is there any IRS or otherwise official acknowledgement of the SIPP structure being recognized as a pension in the DTA? Having a SIPP as a US citizen or tax resident will require some extra reporting and the cross boarder tax simplicity and guaranteed income of a final salary pension should be seriously considered. A final salary pension can be an excellent component of a diversified retirement income portfolio and essentially replace a bond/fixed income component so you can ramp up the equity allocation in your IRA's, 401ks, or UK based work pensions etc

geak Feb 28th 2021 3:43 pm

Re: UK Final salary pension transfer
 
The delay came from UK pension administrators. It is all in rear view mirror now. Alignment with the appropriate regulatory structures is part of the service from the receiving scheme. It is all new to me. Some friends here have been there and have more knowledge.

Otto The Squid Feb 28th 2021 4:07 pm

Re: UK Final salary pension transfer
 

Originally Posted by geak (Post 12978346)
The delay came from UK pension administrators. It is all in rear view mirror now. Alignment with the appropriate regulatory structures is part of the service from the receiving scheme. It is all new to me. Some friends here have been there and have more knowledge.

DB trustees should deal with a transfer request within 6 months.
As far as regulation is concerned, ideally use a UK FCA regd adviser (with DB permissions) that also has an SEC licence.


MidAtlantic Mar 1st 2021 11:40 am

Re: UK Final salary pension transfer
 

Originally Posted by nun (Post 12978199)
Did you have any difficulty transferring to the SIPP because of you rUS tax status and the potential reporting issues for the UK institution? Or has that died down now? Also is there any IRS or otherwise official acknowledgement of the SIPP structure being recognized as a pension in the DTA? Having a SIPP as a US citizen or tax resident will require some extra reporting and the cross boarder tax simplicity and guaranteed income of a final salary pension should be seriously considered. A final salary pension can be an excellent component of a diversified retirement income portfolio and essentially replace a bond/fixed income component so you can ramp up the equity allocation in your IRA's, 401ks, or UK based work pensions etc

Many UK SIPP providers will not open accounts for US citizens or residents. As a dual US/UK citizen I transferred several small pensions (none of them defined benefit) into a SIPP with AJ Bell some years ago. I do not know if they continue to handle such transfers. My reason was to consolidate them into one account and substantially reduce fees. I had no problems with the transfer which went very smoothly.

reltub Mar 1st 2021 2:59 pm

Re: UK Final salary pension transfer
 
Otto, is there a way to identify UK FCA registered advisers, with DB permissions and also an SEC license? Information on that seems scarce.


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