Moving UK pension to Ireland

Wiresandmore

Registered User
Messages
70
Hi

I have circa £300K in a UK pension fund. My wife has around £60K in hers. This is from employment there stretching back 15+ years ago.

We're both 50 and have no other assets in the UK at present.

I have a pension in Ireland from when I started working here 15 years ago.

Given the UK election result creating the bump in sterling back to EUR1.20 and also the fact that we are 99.9% likely to remain and retire here in Ireland, I am considering moving the pensions across here in the coming weeks.

Is there any significant reason not to do this given our circumstances?

Thanks

W
 
This is a query that I am asked quite frequently so I decided to put the common answers into a FAQ [broken link removed]. Here's the main thrust of it...

CONVENIENCE

Having all your pension funds in one place is convenient and easy to keep track of. You'll get a single statement. You may have online access where you can view all your funds at once. If you want to enquire about your pension funds or make changes to where they're invested, everything is in the one place. While this convenience has a value, in my opinion it's one of the least important aspects of the decision.



PHASED RETIREMENT

If you amalgamate all your pension funds into one scheme, then you can only retire once. This might seem like an odd statement - you might think that, like being born or dying, you'll only retire once. But in this context, retiring means drawing down the money from your pension funds. If all your funds are in the one pension scheme, then unless it's a PRSA you only have one opportunity to start drawing your benefits. If you have multiple pension "pots" then you can draw on different ones at different times. Nowadays more and more people are looking into the possibilities of phasing into retirement, perhaps cutting down to part-time hours for a few years before finally giving up paid work altogether. Some people want to spend a few years pursuing a different job that might be of greater interest to them but is not terribly well-paid. Having a number of different pension pots allows you the flexibility to draw on one to supplement a reduction in earned income, while leaving other pots to be drawn down later.



INVESTMENT CHOICE

Before deciding whether or not to amalgamate two or more pension funds, you need to look at how both are invested. This may require a bit of homework. In relation to the funds you are thinking about transferring, find out where they're invested and get a fact-sheet in relation to the fund(s) where they are now. Then get the same details in respect of the pension arrangement where you're thinking of transferring to. Compare the two and make sure that you understand and are happy with the fund choices on both the transferring arrangement and the proposed recipient, before deciding to move from one to the other.



CHARGES

While doing your homework, find out how what the ongoing charges are on the fund you're thinking about transferring. This would usually be an annual charge as a percentage of the fund. Then find out what the charges would be if you transfer that fund into your current pension scheme. When making your enquiries, make sure that you get answers in language that you understand, without jargon. If the charges on the new scheme are higher than the current home of the fund, then perhaps you need to leave the existing fund where it is, unless some of the other considerations justify the extra cost.



CONTROL & TRUSTEESHIP

If your existing fund is in an Occupational Pension Scheme, there are trustees appointed to oversee the scheme. These will usually be a professional trustee, the employer company, specific members of staff or combinations of these. The trustee can make certain decisions in relation to the scheme, e.g. the trustee can decide to move all funds from one pension fund manager to another without your agreement. When you eventually want to draw your funds from the scheme, the trustees will need to countersign your application. So if you have left the employment, you will need to keep an eye on who the trustees of your pension scheme are, as you'll need to be able to contact them. By transferring your funds into a policy in your own name, you take on full control of which provider your funds are with and how they are invested, up to and including full control using a self-administered product. You are also removing the trustees from having any involvement with your fund and you can sign all documents yourself.



WARNINGS

Before deciding to transfer from one pension fund to another, make sure that there are no penalties for transferring the existing fund. Make sure also that the existing fund doesn't contain valuable guarantees or bonuses that you would forfeit if you transfer away. In particular, if your existing fund is in a Defined Benefit (DB) pension scheme, be very cautious before deciding to transfer out. Such DB schemes contain guaranteed pensions that can be very valuable as long as the DB scheme itself is able to pay out the promised pensions.
 
Do you have any advice on closing a US 401k and tax implications or moving it back to Ireland and setting up a private pension for it rather than into my company scheme?
 
Do you have any advice on closing a US 401k and tax implications or moving it back to Ireland and setting up a private pension for it rather than into my company scheme?


US pensions are a lot different. You can't transfer them to an Irish pension.


On the UK pension, you may have lower fees or greater fund choice in the UK.

But if you opted out on the UK state pension, a portion of your pension may contain a guarantee (the UK State pension part) and the pension freedom rules may not apply to your pension. You will also have difficulty in setting up a new plan in the UK as you don't have an address there.

If you transfer your pension to Ireland one of the main rules is that you cannot access your pension any earlier than is allowed under UK rules, which is 55. The other is you have to have been non resident for 10 years which you satisfy.

As Liam says in his first point, convenience is a huge factor. Do you want to be dealing with UK pension companies when you are 80? I'm 44 and I find dealing with them a hard work.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Back
Top