A New Zealand company dealing with British pensions says it plans to quit the international market place for investments under the Qualifying Recognised Overseas Pension Scheme (QROPS) because of uncertainty about the future of the system.
A New Zealand company dealing with British pensions says it plans to quit the international market place for investments under the Qualifying Recognised Overseas Pension Scheme (QROPS) because of uncertainty about the future of the system.
A New Zealand company dealing with British pensions says it plans to quit the international market place for investments under the Qualifying Recognised Overseas Pension Scheme (Qrops) because of uncertainty about the future of the system.
"Qrops-registered" pension schemes allow British expatriates to establish a fund in their host country in which to transfer all their British pensions, which helps them access their pension, or to save tax on the pension once they have lived outside Britain for five years.
After that time, the UK requirement to purchase an annuity by age 75 -- or be faced with the prospect of a possible 82 percent tax charge -- no longer applies.
A North Shore company, Southern Star Administration Ltd, which had been promoting the Southern Star Retirement Fund, has announced it will leave the market from June 30 due to regulatory "uncertainty", a financial magazine, New Model Advisor, reported on its website.
The magazine said that New Zealand regulators were reviewing QRops sales, because it was feared regulations were being used to help clients get access to their pension funds early rather than use them for retirement income.
Unlike UK pensions which get tax relief on contributions but not on income, New Zealand pensioners pay tax on their fund but not on payments.
Southern Star said in a letter to clients that its decision was taken after a review of the scheme's recent member expectations "and the value proposition we offer".
"The directors also believe there is considerable uncertainty regarding the future of the present Qrops transfer system and have an expectation of changes being put in place by regulators which are likely to strengthen the retention requirements for members of New Zealand retirement schemes."
Southern Star said its decision had been made at short notice but would coincide with the end of the UK tax year.
All contributions would remain in the fund which would continue to be registered and regulated by New Zealand authorities until winding up.
Another 85 New Zealand schemes are listed by the British Government as Qrops-compliant.
