Frequently Asked Questions
Q What is a QROPS?
A Qualifying Recognized Overseas Pension Scheme is a NZ Superannuation scheme that has met the criteria set by the UK HMRC to receive UK Pension Transfers. A NZ Superannuation scheme must be registered as a QROPS to be able to receive transferred UK Pension Schemes, not all pension schemes in NZ have QROPS approval.
Q Should I transfer my UK Pension fund to a QROPS in NZ?
A Some people have already decided they want to transfer but if you are unsure, you should only look at transferring your UK Pension when you are fully aware of the benefits that you are giving up and the benefits that the NZ QROPS provides. For most your UK Pension fund is the second largest asset apart from your home, so it is important that you seek a balanced view from people who understand not only NZ Schemes but also UK Pension Schemes.
Q Should I transfer my UK Pension fund to NZ if I think I may be returning to the UK to live?
A Not normally. Once you transfer your UK Pension fund you cannot transfer back to your UK Pension fund. This is one of the reasons why you should only look at transferring when you fully understand what you are giving up.
Q How long does it take to transfer my UK Pension fund?
A Once you have made the decision to transfer your UK Pension fund there is no actual time line as each UK Pension provider takes different amount of time to process your request. It has been known to take up to 12 months but it has also been known to take as little as 5/6 weeks. Part of our commitment to you is that we take the responsibility on for making sure all paperwork is correct and chase the UK providers up for you to speed up the process as much as possible.
Q I know what I consider to be most important to me about pensions but I’m not sure if my objectives are best met in a UK or a NZ Scheme. Can you help me?
A YES we can help you to decide whether to retain your UK Pension in the UK or transfer it to NZ, however this is only after understanding what your circumstances are and what you are trying to achieve from your retirement planning. You will need to complete a Pension Transfer Questionnaire which enables us to provide you a report on whether your goals are best met by leaving your benefits in your UK Scheme or by transferring them to a NZ Scheme.
Q. Do you charge me for this report and do you charge me for transferring my UK Pension Fund to NZ.
A Yes we do for both. If you decide you would like a written report we do charge you $450 NZ Dollars for this service, as from our recommendations it may be in your best interest to leave your UK Pension in the UK, therefore we must cover our costs involved in preparing this for you. This approach also protects you as it ensures that we are under no pressure to transfer if it is not the right thing for you to do. If the decision is made to go ahead and transfer we will charge you a % of the funds transferred to a NZ QROPS. This will be clearly stated in the report we send to you and is fully disclosed to you before any final decision is made to proceed. You do not have to write out a cheque for our transfer fee, it is automatically deducted from transfer funds received by the NZ Scheme.
Q If I leave my UK Pension fund in the UK and take an income do I pay NZ tax on this income.
A YES you do as this is deemed as overseas income and therefore is taxed as part of your worldwide income to be declared. If you transfer to a NZ Scheme first and then take benefits, no tax is charged on the withdrawal.
Q I think I have a UK Pension Fund but I am not sure. How do I find out if I have one?
A. With changing jobs you may have accumulated a number of pension funds so if you click here you will be able to fill in on line your details and they will then come back to you to let you know.
Q Can I withdraw cash from my pension fund once it arrives in NZ?
A Sometimes, yes you can however you have to comply with UK HMRC rules and the NZ QROPS scheme rules, we are happy to go through this with you. The HMRC are very strict on the rules they have put in place as they are aware that people have transferred their UK Pension schemes to Overseas Schemes and withdrawn money which is deemed to have been invested for your retirement. Likewise NZ QROPS Schemes are also strict about what and how much you can withdraw as they do not want to lose their QROPS status by making un-authorized payments.
Q Why should I use you rather than another company?
A Good question. The best judge of this is not for us to say but some of our clients. A large proportion of our business comes from existing clients and professional introducer’s referrals and we believe this speaks volumes about why people use us.
Please click here for what some of our clients have to say about us.
We believe our experience in both UK and NZ Financial Services gives us a major advantage.
Q. What death benefits does a NZ Pension scheme pay?
A. The full value of the members fund is paid as a tax free lump sum to their beneficiaries. This gives excellent control as the pension fund can then can be passed down not only to your spouse/partner but then also onto your children or estate. This is not always the case with UK pension schemes
Q. Part of my move to NZ is lifestyle reasons. I don’t want to work until 65. How are my pensions affected if I want early retirement?
A. In NZ with the schemes we use you do not lose any of your fund if you chose to retire early. The only restrictions are whether you meet UK HMRC and NZ Superannuation scheme rules on when you can take benefits (we can advise you on this).
A. UK Final Salary scheme will normally reduce your benefits and a reduction of 3-4% for every year under the schemes normal retirement age is not unusual. Add this to the NZ tax payable if you draw your benefits from a UK Scheme (not taxed if drawn from a NZ Scheme) and it is not uncommon for a large reduction in benefits to apply which could mean anything up to 40 – 50% loss.
