Types of UK pensions that can be transferred

The 2014 budget and subsequent amendments set out the most radical UK pension changes ever which fully came into effect on 6 April 2015. These UK pension changes have affected almost every private or public sector UK pension – this has led many people to ask the question can I move my pension from the UK to a New Zealand QROPS. Not all types of UK pension can be transferred to New Zealand. You cannot transfer your UK pension to a New Zealand QROPS if the scheme is a:

  • State pension
  • Fund where a pension has been taken as an annuity
  • Unfunded Public Sector Service Schemes (e.g. Doctors, Nurses, Police, Armed Forces, Teachers and Civil Service)

The largest impact of this was the elimination of the ability to transfer unfunded public sector service schemes, which probably account for around 30% of all pensions in the United Kingdom.

However, while these pensions are no longer transferrable there are still many others that can be. You can move a UK pension to a New Zealand QROPS if your UK pension is a:

  • Final Salary Company Schemes (often called Defined Benefit Schemes)
  • Defined Contribution Company Schemes (often called Money Purchase Schemes)
  • Funded Public Sector Service Schemes (e.g. Local Government)
  • Personal Pensions including Stakeholder and Group Personal Pension Schemes
  • Contracted out of SERPS (Protected rights)
  • Retirement Annuity Contracts (RAC) and s32 buy outs
  • Funds where income is in drawdown but an annuity has not been taken

 
However, it is worth noting that when the first draft of the above mentioned legislation came out all final salary and defined benefit schemes in the UK were going to be locked in and therefore unable to be transferred to any QROPS. The initial thinking behind this was to protect the stability of the source the Governments largest bond purchasers – large final salary scheme pension schemes. After much debate the legislation was scaled back to only deal with the unfunded public sector schemes defined above.
 
With the UK economy still not out of recession it is foreseeable that the legislation could again easily be amended to include these schemes – so it might be a good time to ask should I move my pension. Given the swiftness with which the last set of legislation was introduced it would be prudent for anyone that is holding a final salary pension to review their options.
 


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