Defined Benefit Scheme Transfers to NZ Super QROPS
An NZ Super QROPS is for British expats, Irish expats, European expats and NZ expatriates who are moving overseas from the UK, not just for residents in New Zealand.
UK Defined benefit pension schemes, final salary pension schemes, personal pensions, UK SIPP’s, Irish PRSA’s, Dutch pensions and European Pillar 2 pensions can all be transferred to a NZ Super QROPS.
“New rules will come into effect on April 6, 2015 which will mean that public sector defined benefit schemes CANNOT be transferred to New Zealand.”
This is the last chance for a transfer from a UK pension scheme to New Zealand for Local Government Pension Schemes (LGPS): Royal Mail, British Gas, British Transport, NHS, nurses, doctors and UK armed forces schemes can be transferred to a QROPS in NZ, but only until April 2015.
Private sector DB schemes (final salary pension schemes) can be transferred to New Zealand as long as they are not “in retirement”. In other words, as long as you are not receiving pension income yet from your final salary scheme.
NZ Super QROPS Fees
There are two parts to a QROPS. The NZ QROPS trustees who administer the pension and the second part involves the investment managers who run the day to day management of the fund.
We have long developed relationships with NZ Superannuation QROPS trustees and we have sourced the lowest NZ QROPS fees for our clients.
NZ QROPS Trustees Fees (NZ Actuarial Fees)
300 GBP set up fee
300 GBP annual fee
NZ QROPS Investment Fees (Broker/Fund Manager/Admin Fees)
NZ$600 set up
NZ$600 per year
NZ$50 for fund switching and no exit charge
You can select from FIVE investment strategies based on your risk preference: cautious, conservative, balanced, progressive and adventurous.
NZ Super QROPS Returns
|NZ QROPS Global Growth Fund||12.85%||13.11%|
The returns above are annualized and net of management fees.
Who Can Benefit from an NZ Super QROPS?
Examples of NZ QROPS Members
British expats moving to New Zealand or already living in NZ. A transfer to the NZ Superannuation Scheme QROPS will avoid all UK taxes and get the pension pot into New Zealand.
New Zealanders who have worked in London and built up a sizeable pension pot. They can transfer their UK pension(s) to a NZ Super QROPS to avoid all UK taxes, particularly the 45% tax upon death after 75 years old and they also can get access to a larger tax -free cash lump sum at retirement.
British expats living overseas who have a final salary scheme or money purchase pension scheme in the UK. The transfer will avoid UK and NZ taxation.
Irish expats living abroad who have built up a PRSA in Ireland. They can transfer all their pensions to a QROPS in NZ. They will avoid all taxes in NZ and Ireland. They would only pay income tax in the country they retire to.
Dutch expats living overseas who have a Pillar II pension that they have built up in the Netherlands. They can transfer to a QROPS in NZ to avoid Dutch taxes. They would only pay income tax in the country they retire to.
A British expat retiring anywhere in the world, except the UK.
A NZ expat who has a UK pension retiring anywhere in the world, except the UK.
Irish expats with a PRSA or an Irish private pension retiring anywhere in the world, except Ireland.
Dutch or European expats with pillar II pensions who are retiring anywhere in the world. It will be up to the discretion of the existing pension scheme as to whether they allow a transfer out to a NZ Super QROPS.
Please email us at QROPS Specialists for more information
QROPS NZ Warning
New Zealand QROPS Warning: This is your last chance to transfer public sector final salary pensions.
If you work for the NHS, fire service, local council, civil service, armed forces, teachers and doctors CANNOT transfer their pension to New Zealand after April 6th, 2015. A pension transfer to New Zealand takes on average at least 3 months, so time is running out. LGPS (Local Government Pension Scheme Transfers) to New Zealand will not be allowed after April.
Please contact us about an LGPS pension transfer out to NZ. Transferring out of an LGPS scheme to a QROPS in NZ is allowed by HMRC until April.
The latest an option to transfer can be made is one year before age 65 or six months after leaving the scheme, if this is later. A QROPS in NZ is NOT a pension liberation fund. This is an HMRC-approved QROPS which allows British expats and returning New Zealanders who have built up a pension scheme to transfer to a QROPS in New Zealand.
UK Pension Transfers to Kiwisaver Schemes in NZ
Kiwisaver schemes are pension schemes in New Zealand which is used by New Zealand residents. Normally, they are used by people born in New Zealand who have contributed to the Kiwisaver scheme over their lifetime.,
Kiwisaver schemes in general may not be appropriate for your QROPS. There are many parts to a Kiwisaver scheme which do not follow QROPS rules. This may lead to an unauthorized 55% tax charge by HMRC. For example, many Kiwisaver schemes allow for pension monies to buy a house or put a down payment on a mortgage, access a pension at an earlier age if ill and full withdrawal at 65. This is contrary to QROPS pension rules,
A QROPS in New Zealand does NOT allow these benefits. An NZ QROPS must follow HMRC’s QROPS rules, which currently means 30% is allowed as a lump sum and the rest to provide an income for life.
Instead we recommend transferring to a NZ Superannuation Scheme specifically designed to be a QROPS.
UK Pension Transfers to a NZ Superannuation QROPS
What are the pros and cons of transferring your UK pension to a NZ Superannuation QROPS?
Advantage of a NZ Super QROPS
• Transfer all your UK pensions into one NZ Superannuation QROPS where you can manage all your monies online
• 30% cash lump sum available (this is higher than the 25% allowed in the UK). The other 70% has to provide an income for life
• 100% of any growth of the NZ Super QROPS can be taken as a cash lump sum
• Can retire and take pension at 55. No maximum age to take pension
• No tax on growth of the NZ Super QROPS
• No tax on death of the NZ Super QROPS
• Low fees compared to other NZ pension schemes
• New Zealand has 36 Double Taxation Agreements (DTA’s) with countries from all around the world including Australia, the UK, China, HK, Indonesia, Malaysia, Singapore, Thailand and many EU countries
• Pension held in GBP
• UK FSA and NZ based discretionary fund manager. It is regulated by the NZ Financial Markets Authority (FMA)
Disadvantages of an NZ Super QROPS
• Limited investment strategies
• No flexible drawdown (2014)
• Limited currency choice
• For those requiring the above, it may be better to use a UK SIPP or a MALTA QROPS
Who Can Transfer to a NZ Super QROPS?
NZ Super QROPS Members
Members of the NZ Super QROPS can be either resident or non-resident in New Zealand.
Both British expats, Irish expats, European expats and New Zealand expats returning from the UK who have built up a substantial pension in the UK can transfer a pension to a NZ Super QROPS.
Irish expats with a AVC PRSA, Irish Personal Pension, Irish Executive Pension, Irish Approved Retirement Fund (ARF) and Irish Pension Retirement Fund can transfer to a QROPS as long as your current provider allows it.
Transfers In to NZ Super QROPS
The New Zealand Super QROPS can accept transfers from UK registered pension schemes and from EU pension schemes. However, it should be noted that transfers from EU pension schemes cannot be guaranteed and are at the discretion of the transferring scheme administrator.
Retirement Age for NZ Super QROPS
The minimum retirement age from the New Zealand Super QROPS is age 55. The New Zealand Super QROPS does not have a maximum retirement age.
Tax on pension income of NZ Super QROPS
Pension income paid from the New Zealand Super QROPS is not subject to tax at source, which could be very advantageous for clients. It avoids all UK taxes.
In addition, New Zealand benefits from many DTAs which may mitigate income tax further in the country of residence.
Normally, you would only pay income taxes in your country of residence.