The Qualifying Recognised Overseas Pension Scheme (QROPS) industry has had a topsy-turvy year in 2016.
The year started with HM Revenue and Customs (HMRC) reporting 943 QROPS were available to expats worldwide – 27 up on the number before Christmas.
The number of QROPS steadily increased to an annual peak of 1,286 pensions by November 2016.
At the beginning of November, 76 QROPS were delisted by HMRC – 49 in Canada, 11 in France and 19 in Italy.
All the QROPS in Italy and France were delisted, leaving none available from either country.
In Canada, only three schemes were left live, all offered by the Bank of Montreal.
Cull in Canada, France and Italy
The apparent reason for the cull were concerns from HMRC that the missing QROPS broke the pension age rule – a qualifying test all QROPS must pass.
The rule says a pension cannot become a QROPS if benefits are available to any retirement savers aged less than 55 years old except as a payment in the event of serious ill health.
Some providers in Canada have revealed HMRC has written to them confirming the investigation, in their qualification status which should complete early in January 2017.
Meanwhile, Finland joined the QROPS party after an absence of a year. Two pensions were delisted in June 2015, with one scheme joining the QROPS List in July 2016.
Australia ended the year as the world’s largest QROPS provider by number of schemes, with the total growing from 64 in January to 369 in December 2016.
Australia is leading QROPS centre
In January, Australia had a 6.8% share of the market by number of QROPS. In December, this had risen to 29.7%.
More pension tinkering from Chancellor Philip Hammond was announced in the Autumn statement 2016.
Besides tougher rules for providers, who must be regulated in the country where they base a QROPS, a host of measures aimed at reducing pension scams were set in motion.
They include a ban on pension cold calling, powers for UK pension firms to stall transfers to dubious schemes and the scrapping of the 70-30 rule for QROPS.
Getting rid of this rule allows QROPS providers outside the European Union to offer retirement savers flexible freedoms on the same basis as they are offered to savers in the UK.