FMA warns against misleading UK pension scheme transfers advertising
The Financial Markets Authority is warning against misleading advertising about transferring UK pension scheme entitlements to New Zealand to avoid incoming tax and legislation charges.
The ads claim changes in UK legislation and New Zealand's tax treatment of offshore pensions, which come into effect in April 2015 may create either a loss of access to the pension fund or a lump tax charge to the incoming cash. New Zealand's financial services watchdog is concerned the sense of urgency will cause false alarm and has asked for some materials to be removed from publication, it said in a statement.
"We are concerned that people are feeling press-ganged into transferring their pension scheme entitlements from the UK and being put under pressure to act now," said Elaine Campbell, FMA's Director of Compliance. "We are concerned that tax issues and a misleading sense of urgency are being exploited by some providers to scare people into transferring their money, without offering a balanced view of the potential pros and cons involved."
One New Zealand-based UK pension transfer adviser, who didn't want to be identified, told BusinessDesk the culprits of deceptive advertising were mainly British companies based in Spain and that although the regulator may have concerns, their business was telling people the changes. They said their business had not been contacted by the FMA.
A spokesman for the FMA said a number of New Zealand-based business had been contacted. He declined to name which companies had been contacted.
The FMA notes that 'old age' state pensions provided by the UK government at retirement are not transferrable, so this warning does not apply to these pensions.