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Public sector pension QROPS transfers under fire
| Published: | 21 Apr at 6 PM |
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Public sector workers and civil servants are being warned by pension experts that they may be barred from transferring their pension pots to a QROPS.
UK chancellor George Osborne has already stated that different pension rules may be introduced for pension savers working in the public service sector and the civil service. The plan may prove to be part of the controversial pension shake-up announced in his 14 March budget speech.
The chancellor’s exact words on the subject were that, having carefully considered the issue, the government intends to introduce legislation to remove the transfer option for workers in public sector schemes. Limited exceptions, he added, might apply.
He continued that, in principle, an opportunity for pension savers in the private sector to have greater choice over their savings is welcome, the government is not prepared to inflict significant damage on the wider economy as a result. He added that defined benefit schemes play a strong part in funding long-term investments in the UK’s overall economy.
A decision on how the government intends to proceed is expected later this year and, in the meantime, there are many points for those with public sector pension to consider. The most important is that almost all public or civil service pension include enhanced benefits rarely available to savers in private pension schemes.
Although QROPS are an attractive proposition, especially for would-be expats hoping to spend their retirement overseas, giving up irreplaceable benefits needs careful thought. Pension transfers are available and may be viable, but the administration is more complicated and requires professional advice from an experienced advisor.
UK chancellor George Osborne has already stated that different pension rules may be introduced for pension savers working in the public service sector and the civil service. The plan may prove to be part of the controversial pension shake-up announced in his 14 March budget speech.
The chancellor’s exact words on the subject were that, having carefully considered the issue, the government intends to introduce legislation to remove the transfer option for workers in public sector schemes. Limited exceptions, he added, might apply.
He continued that, in principle, an opportunity for pension savers in the private sector to have greater choice over their savings is welcome, the government is not prepared to inflict significant damage on the wider economy as a result. He added that defined benefit schemes play a strong part in funding long-term investments in the UK’s overall economy.
A decision on how the government intends to proceed is expected later this year and, in the meantime, there are many points for those with public sector pension to consider. The most important is that almost all public or civil service pension include enhanced benefits rarely available to savers in private pension schemes.
Although QROPS are an attractive proposition, especially for would-be expats hoping to spend their retirement overseas, giving up irreplaceable benefits needs careful thought. Pension transfers are available and may be viable, but the administration is more complicated and requires professional advice from an experienced advisor.
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