Warning from GBPensions
Warning from GBPensions
Is the clock ticking for NZ resident members of the Public Sector Transfer Club?
Due to radical plans to reform pensions currently under consideration by the UK Treasury, British ex-pats could miss out on significant pension opportunities if they fail to act quickly. That's the warning from GBPensions, an Auckland based firm who specialise in the transfer of pension schemes from the UK to New Zealand.
Those potentially affected by the new legislation are former UK state employees who have retained benefits in their superannuation or pension schemes (collectively known as "the Club") and include:
· University lecturers
· Armed forces personnel
· Police officers
· Prison officers
· Fire fighters
· Civil servants and local government employees
"Before the NZ IRD's deadline for overseas pension transfers had even been reached, these changes were proposed in the UK’s Budget announcement," explains GBPensions' director Tony Chamberlain. "Now, if people don't act in time before April 2015 they may never be able to transfer their pension scheme. They'll effectively be trapped into a tax liability under the draconian NZ system for the rest of their lives, with no possible way to manoeuvre.
horrendous tax consequences, they will also have lost the
ability to benefit from the numerous advantages that NZ
pension schemes have to offer."
Traditionally, Britons have been cautious about moving their UK pensions.
However, due to the current UK financial climate of low interest rates and even worse annuity rates, transfer values quoted by schemes in the Club may never be as high again in relative terms. Therefore, combined with the new NZ tax rules and the April 2015 deadline looming, it would seem that greater consideration than ever before is required in assessing the viability of transferring a UK pension scheme.
GBPensions are keen for clients to have realistic expectations about the timescales involved in a pension transfer. Six months is a reasonable prediction, especially since it is not unusual to wait 12 weeks (or longer) to receive documentation back from the former UK employer.
Tony Chamberlain comments, "Members of the Club already account for about 15% of our clients. For obvious reasons, we're expecting this number to increase dramatically over the next two to three months."
For a copy of the full list of UK schemes in "the Club", or to find out if you are affected, please email email@example.com.
Tony Chamberlain is an authorised financial adviser whose Disclosure Statement is available without charge or obligation by contacting the email address above.