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WHY MOVE YOUR PENSION TO AUSTRALIA?
While you could choose to be paid a pension from the UK many people prefer to transfer their pension funds to Australia for these reasons:
If you have a defined benefit pension plan you need to be aware of the changes made in the UK Budget 2014 to these schemes. The legislative changes made by the Chancellor of the Exchequer are so significant that Brits who were brought up to believe that they had guaranteed benefits will lose them. From 1 April 2015 if you have a public sector defined benefit pension plan you will not be able to transfer it. The Private Sector defined benefit plans are under consultation and legislation may result in private sector schemes also being unable to be transferred to New-Zealand.
The paper; Freedom and Choice in Pensions produced by HM Treasury in March 2014 refers to how public service defined benefit schemes operate on an unfunded basis. Contributions of members and employers are used to pay for pensions and surplus payments are met by taxpayers via the Exchequer. If a member chooses to take a lump sum cash payment by transferring the pension to a defined contribution plan (which would enable the member to transfer the pension funds to AU) the direct upfront cost must be met by the Exchequer. The paper estimates that the cost of 1% of public service workers transferring out of the schemes each year would be 200,000,000 GBP payable by the Exchequer. It is for this reason that the new legislation will remove the option to transfer from defined benefit schemes for Government employees including Railways, NHS, Teachers,Police etc.
We suggest you start your pension transfer process now by applying for your FREE personalised pension transfers report.