QROPS transfers for Final Salary Pensions to end 2015

By: PRLog
Final Salary scheme ex pats need to act now! As time is running out!
PRLog - Sep. 19, 2014 - SAN FRANCISCO -- Full article here.........

If you have a Final Salary, also known as Defined Benefit UK pension scheme. And you are now a UK non-resident, or believe you will become non-resident, and you are no longer an active member of your pension scheme, you need to act now!

A word of caution. A QROPS transfer is not for everyone. A Final Salary scheme transfer to a QROPS needs to be carefully evaluated given the guarantees that will be given up.

However, Final Salary scheme transfer values are the highest they have ever been, given the way they are calculated. In fact, they are more than double what they were five years ago.

The UK Government has now put in place pension legislation that ends Final Salary scheme transfers from April 2015. So time is running out.

So act now and take the opportunity to see if it is in your interest to transfer or not. But tread carefully as most advising on QROPS are unqualified. You must use an adviser who has been accredited with the UK advanced pension qualification, G60 or AF3. Also a TVA (Transfer Value Analysis) must be undertaken. Note this is not an investment illustration, as is quite often used by unqualified advisers.

A TVA must follow a format of evaluation, governed by a specific set of rules regarding rates and assumptions that are used. It is a direct comparison of your existing UK pension compared to the proposed QROPS, and concentrates on the effect of the charging structure of the QROPS. The lower the charges, the more beneficial the QROPS will be. It will also produce a figure called the critical yield. This is the calculation of the investment return required by the QROPS to match your UK scheme benefits.

The UK Government intends to make far more changes under the guise of pension reform. Most are simply ways of cost cutting and raising additional tax revenue.

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