We all like reliability: reliable answers to important questions, most of all. Here are your most pressing QROPS questions, answered by none other than our President, Tim Carroll.
Our president, Tim Carroll, has been navigating the channels of the British pension industry since the Rolling Stones first hit #1 on the charts with Honky Tonk Women back in 1969. 12 years after that, he turned his focus to British expatriates when he joined their leagues himself in 1981.
So it probably comes as no surprise that he’s seen his share of pension questions from expats – especially those residing within the U.S., which is where UK Pension Transfer LLC is registered and regulated by the SEC. He’s also seen the rules change, and most of all during the last few years.
QROPS: Confusing for Everyone!
One of the most confusing aspects of living abroad is how you can get the most out of your pension(s), especially in light of the big changes that have taken place in the past decade.
Perhaps among the most significant changes is the advent of the Qualifying Recognised Overseas Pension Scheme (QROPS) in 2006, and all the opportunity that it brings with it. Here, straight from the expert himself, are answers to your most pressing questions about this program, and how you might apply its benefits to your own retirement plans.
Advice from the Field
First, Mr. Carroll has some general advice for current expats who want to learn about maximizing pension funds. You should, by the way, always be seeking ways to maximize your pension benefits, rather than settling for the default or doing nothing at all. And by ‘maximize’ we mean to get the most from reducing loss and/or growing your nest egg.
If Tim Carroll’s general advice to pensioners had to be summarized in one sentence, that advice would be:
First and foremost, it’s important to understand your pension options.
So, to that end, here’s a handy, condensed guide to understanding QROPS, in the form of questions answered. It should clear up much of the mystery surrounding your pension options.
“What exactly is QROPS?”
This is a pension plan that operates outside the UK, and which has passed certain requirements set forth by Her Majesty’s Revenue and Customs. If a pension scheme is labeled as “QROPS”, then it can receive a non-government UK pension transfer.
While you may see QROPS bandied about, the term now is officially ROPS, meaning any plan you see on the government list is not necessarily qualified. If you’re thinking of transferring your pension to a QROPS, be sure to talk to an expert and make sure your transfer plans meet regulations.
“Can I transfer my frozen government pension into a QROPS?”
You may have seen this in the media the last few years: so-called “frozen pensions” refer to the government pensions which remain stuck at the level where they were when the expat moved overseas.
For expats residing in Canada, for example, it’s entirely possible they might be receiving state pensions amounting to just £75.50 a week, as is the case with one 90-year-old woman who emigrated to Canada 15 years ago.
However, with UK expats living in the U.S., that’s not a concern because here, your Government pension is tied to the Consumer Price Index. That means when prices go up, so will your pension payments.
It would be nice for Canadians with a UK pension to be able to transfer them into a QROPS, but alas, it’s not possible.
“But what about my frozen occupational pension?”
Now, this is a different matter. This is definitely where you can make a difference and maximize your pension for a better outcome. The best thing to do is to speak to a licensed, expert Financial Adviser about your options. We invite you to call 1-888-978-2147 and speak to Tim, or fill out our free quote form to learn more.