Bringing UK pension into Switzerland and QROPS

Finance, Taxes, Banking, Insurance and Retirement
61
Mr. Cohen, you know as well as I do that Polyreg only covers your obligation to abide by money laundering prescriptions - identification of beneficial owner, documentation and filing... and that's it. And it doesn't by far give you an "umbrella registration" into the UK.

Occasional meetings in the UK dispensing investment advice sans FSA registration... tssk tssk.

Aw come on, let's not pull the discrimination card so early. We are amongst finance professionals aren't we? How is your offer of mutual funds run by "to (sic!)-big-to-fail-institutions" an alternative to the "to-big-to fail-institutions"?

62
Hey, Steven J. Cohen, CPA with an accounting background are you any relation of this Steven J. Cohen, CPA with an accounting background ?

You don't look like him .

63
So, HRMC have effectively shut down Guernsey as a QROPS destination, removing 300 and leaving only 3 QROPS approved schemes.

What this means for existing QROPS customers with a pension in Guernsey is anybody's guess.

Switzerland still looks good with dozens of providers listed.

64
17c, if I knew how to "thank" you for that very important post I would.

65
Following the QROPS development with the new British legislation closely as too many clients have been gulled in Germany to sign up for such QROPS schemes - the company-that-must-not-be-named claims after all to have handled about 1/3 of all outgoing QROPS capital from the UK last year.

It seems that the existing/old QROPS in Guernsey for now is not in danger of being levied with tax penalties, unlike what happened to the "de-listed" schemes in Singapore some time ago. It is yet to be seen if this will be kept on, but right now it appears none of those people who used QROPS schemes in Guernsey will lose out on the tax side....though they may have lost out seriously already on high fees and bad investment performance.

Cheerio

66
I was thinking more along the lines of what happens to the schemes now that they are closed to new customers.

Are the providers likely to keep them running? or sell them on? consolidate? advise another transfer elsewhere?

67
Unmentionable company caught up in diplomatic embarrassment:

68
The company that can't be mentioned called me last week.

"I have your details from XYZ, senior partner with the company in Geneva"

Well that's funny, innit, I haven't ever met Mr. XYZ nor gave him my details (that didn't really seem to phase off the sales)

"So we are the world's best providers of investment advise and retirement schemes and would like to schedule a meeting to take you through the intricacies of 2nd pillar and 3rd pillar".

Yes but I manage my firm's 2nd pillar so I suppose I already know quite a bunch about said intricacies. (that didn't really register either).

"Yes, but this is only an introductory meeting, no engagement, we'd like to help you plan your retirement"

Seriously people...

69
I can see QROPs has been debated in detail on many threads. But, I can't find a match for my situation.

I have two, small legacy pension plans from the UK. One is a DC from a previous employer, the other a free-standing AVC.

IN Switzerland, my current employer's pension is a HMRC recognized QROP and allows transfers in to buy additional years of service in a DB scheme. There's no cost to receive the transfer but the FSAVC provider are charging a 4% exit fee and their FX rate won't do me any favours.That said, the FSAVC is not growing in value where it is.

I don't want access to the cash. However, my esteemed HR colleagues are certain that a QROP transfer in can be used like other accrued benefits for a house deposit in Switzerland without tax penalty from UK. I'm not sure if this is true, but it is something I would like to do.

I am not permitted to deduct the QROP transfer from my taxable income (which seems fair because it was initially accrued in the UK from gross income).

I can also buy years of pensionable service from savings and these can be deducted from taxable income and although I don't understand the maths, I was given a simulation showing the impact on the annual pension and it looks worthwhile.

This means a lot to my family. Having a retirement income that in some way matches likely retirement cost of living and our own home might be the decider between us being able to put down roots here permanently or not.

I'd welcome comments and input.

70
That's not because where it is, but what it's invested in. It's probably worth 20% more in CHF terms than a year ago. The FTSE is way below its peek 12 years ago. Moving will cost 4% plus exchange rate fees.

71
If you can really consolidate your FSAVC and legacy DC into your main swiss pension, buying years in a swiss DB = defined benefit scheme in exchange for 4% cost I personally would jump at it, particularly if you can buy time at a reasonable price.

I would agree with your HR dept, once its part of your 2nd pillar it's as good as other monies in there. You will probably want to use it indirectly rather than directly as mortgage security anyway?

The 4% charge sounds like a bit of a rip off though, but probably nothing you can do about it except be rid of such usurers.

72
I dont really know why you would want to transfer a DC scheme to another most of them are loaded with benefits that QROPS cant match, also its not really worth transferring anything under 100k due to the AMF that you will have on a QROPS

73
@Swans1984.

1) Please read the OP's post. He seems to have the opportunity to buy credit in a DB scheme, and credit into a DB scheme is probably worth its weight in gold compared to leaving it is a DC scheme.

2) Your under 100k comment is total BS. I transferred my legacy schemes including a few KGBP opted out SERPs languishing in Standard Life FOR FREE and consolidated them with my 2nd Pillar with less AMF fees.

3) Please stop lumping all QROPS into a single pot. As we agreed in another thread a QROPS can be any old scheme that is further to self registration with HMRC able to receive transfer of UK pension savings in a tax neutral way.

74

Point 2, the Op has asked about a QROPS, not a pillar 2, A QROPS would have setup fees of about 645, and annual fee of 645 and then the fund would have an AMF of between 1.5 and 22.75 percent.

He wanted information on a QROP not pillar 2

75
To be clear. The pillar 2 pension from my employer is registered with HMRC as a QROP to enable relocating employees to transfer in legacy pension arrangements.

Other than the 4% charged by the old provider of the pension fund to transfer the fund to the QROP, there are no set up or annual fees.

It is transferred into the pillar 2 and used to buy additional years service.

76
But a Pillar 2 does not have benefits of a QROPS, and has a lot less scope for growth.

77
There is no mention of Defined Benefits thats rare in CH. Anybody in CH can buy the missing years of their Pillar 2, it's just the system.

78
Yes. I mention in my first post that the receiving QROP is a DB scheme and the transferred in funds are used to buy extra years of service.

From the simulation I was given, the transferred in funds have the effect of increasing the % of final salary on retirement.

79
Is any of that guaranteed, or just a simulation, upto 13.5% was used in the Uk 20 years ago as a compound growth rate......

80
Best thing is to speak to a QROPS specialist who can advice if it is worth it or not. But make sure if you do ask them to get a report from an independent specialist there are a few companies i know which do this for every QROPS which puts the clients mind at rest

How much are the pensions worth???