QROPS main benefits
Transferring UK pension rights to an Overseas Pension Scheme under the UK QROPS provisions offers significant benefits to expatriates.
The normal UK minimum pension age will still apply to the transferred pension benefits but QROPS arrangements can offer considerably more flexibility than UK pensions.
Currency
Members of UK defined benefit company pension schemes receive pension incomes that are linked to their salary at retirement, which will almost certainly be calculated in GBP. Whilst this has traditionally been seen as providing a degree of financial security for those living and retiring in the UK, this may not be the case for expatriates or indeed any non UK citizen retiring in their home country.
During the three years to January 2008 the British Pound fell by over 20% against the Thai Baht, faring only slightly better than the US dollar over the same period!
QROPS arrangements allow for the payment of pensions in currencies other than GBP providing a valuable safeguard for expats.
Investment allocation
UK pension funds will often have a bias towards investment in UK assets. QROPS pension funds provide the scope for diversifying away from UK based investments as well as the option for more personalised investment management.
Beneficiaries
QROPS pension arrangements will usually ensure that residual pension funds pass to the intended beneficiaries much easier and quicker than would be the case in the UK.
Asset protection
Depending on the jurisdiction chosen for the Overseas Pension Scheme, QROPS arrangements can provide greater protection against creditors and other claimants than is typically available in the UK.
For more information please email us.