Pension Transfer FAQ
 We have been most concerned at reports of UK migrants being quoted exorbitant fees for execution only UK pension transfers.
Some transfer services don’t even give you a choice of where your funds are invested, and do nothing to minimise your exposure to exchange rate fluctuations. Others will only deal with large transfers, or fail to disclose their fees clearly. We have even met Brits who have been told that they have to transfer their pensions, which is certainly not the case.
You are right to ask plenty of questions of any pension transfer service. We hope you find our list of FAQs useful.
- What experience do you have of arranging UK pension transfers?
- Can I get access to my pension funds before retirement age?
- But I've been told I can take out a small amount?
- How long will it take to transfer my pension?
- How can I protect myself from exchange rate fluctuations while my pension transfer is being processed?
- Do I really have to transfer my pensions within 3 years?
- Do you offer advice on whether a transfer is in my best interests?
- What do you charge for pension transfers?
- But some places offer free pension transfers…
- Do you offer the Qualifying Recognised Overseas Pension Scheme (QROPS) of more than one NZ provider for me to transfer to?
- Should I transfer my UK pensions into a KiwiSaver scheme?
- What can I invest my pension funds in?
- How much are the fund fees?
- Will I receive ongoing advice?
- Can I get access to my pension funds before retirement age?
For the first 5 complete tax years after you arrive in New Zealand, you can only take benefits if you would be eligible to them if you were still in the UK. However, after this time you can take lump sum benefits with no liability to any UK tax. This could be as much as 100% as a tax free lump sum, although in practice most New Zealand pension scheme providers will have their own limits on what you can draw down before retirement age (normally around 40%). Some funds are more flexible than others.
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But I’ve been told I can take out a small amount?
The UK HMRC website specifically states that there is no amount that can be withdrawn from a QROPS without being subject to QROPS reporting requirements. So, if you withdraw a sum, no matter how small, from your QROPS within the 5-year reporting period if you would not have been entitled to it had you not transferred to a QROPS, you could be subject to an unauthorised payment charge and penalties of as much as 55%.
- How long will it take to transfer my pension?
UK pension providers vary widely in the speed of their response to transfer enquiries, and even in the methods they are willing to use to transfer funds – but most transfers take around three months. Our fastest ever was three weeks, and our slowest was nine months. We do our best to expedite the process, couriering documents to the UK, and calling to confirm receipt of documents and for frequent progress reports.
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Do I really have to transfer my pensions within 3 years?
No – most pensions can be transferred any time as long as you have not
yet purchased an annuity. The 3 year limit is the length of time that
you can continue paying in to your UK pension scheme once you have left
the UK without New Zealand tax implications.
- How can I protect myself from exchange rate fluctuations while my pension transfer is being processed?
You can hold the majority of UK pension schemes in pounds sterling with
our preferred New Zealand pension schemes, earning competitive
interest, while you wait for a good exchange rate.
Please note that under NZ tax laws currency gains made are taxed within the pension fund whilst losses can be offset.
- What do you charge for pension transfers?
We charge stepped fee of 1% - 2.5% of the funds transferred, depending
on the size of your pension fund. The fee is deducted automatically
once they have arrived in NZ. We do find that due to the currency
control we can build in, many of our clients have actually made more
than we have charged them. Most of our advice is free, but we sometimes
make a charge for a comprehensive report on your pension funds. This is
only necessary if your situation is particularly complicated.
- But some places offer free pension transfers…
We’ve come across some organisations who say that their pension transfer service is free. We’ve have researched them and found that there really is no such thing as a free pension transfer. You will be charged for the service one way or another, either through ongoing management fees, plan fees or the difference between the buying and selling price of the units in the funds recommended. They are all obliged under New Zealand law to disclose these charges, but some make it clearer than others.
At Broadbase International we make it a point to fully disclose all of our charges. We provide a personalised, specialised, expert pension transfer service, and we believe that our fees are very reasonable – less in fact than many of the “execution only” pension transfer services, where you are not given any advice as to whether transferring your pension is the best course of action for you. We pride ourselves in offering you the opportunity to choose when to convert your transferred funds from Pounds to Dollars, a service which makes the vast majority of our clients considerably more than they pay us in fees. And we offer you an unrivalled range of investments, rather than a small sub-set that leaves you with very little choice.
It’s the way we prefer to do business, and we think it offers you a number of benefits. We encourage you to look around at the various pension transfer services available in New Zealand, and we are happy to help you to assess the alternative options that other organisations come up with.
- Should I transfer my UK pensions into a KiwiSaver scheme?
A number of KiwiSaver schemes have QROPS approved status, and can accept pension transfers from UK pension providers. But KiwiSaver schemes are far more restrictive than other NZ pension schemes, both in terms of when you can access the money and what you can invest it in. We would not normally recommend that a UK migrant lock their transferred pension funds into a KiwiSaver scheme.
- What can I invest my pension funds in?
Most QROPS-approved New Zealand pension schemes have limited investment choice, but one of our preferred schemes gives allows you to select from literally thousands of investments, including cash, stocks and shares, managed funds, fixed interest investments, listed property trusts and UK investment trusts. Another gives you access to an expertly selected range of funds, with ready-made portfolios carefully weighted to give you the appropriate risk exposure according to your individual requirements.
We work with you to design a portfolio of investments within your
pension scheme that helps you to reach your goals but also to ensure
that you are comfortable with the investments recommended.
Read on for our Pension Transfer Decision Guide, a flow chart designed to help you to decide whether transferring your UK pensions to New Zealand is the right option for you.
Please fee free to contact us if you have any questions about your UK pensions, and don't forget to order your free copy of our comprehensive UK Pension Guide.
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Pension Transfers 
