International Retirement Funds - For Australians and other Nationalities

Superannuation structures within Australia provide a tax effective environment within which to save for retirement. However, it provides a low tax environment only within an Australian context - with both contributions and earnings still attracting tax during the accrual phase.

Depending upon your personal circumstances - including the host country in which you are located, whether you intend to pursue a long term expatriate career, your projected contribution levels and your retirement plans - it may be very beneficial for you, and/or your employer, to consider participation in an International Retirement Plan.  This is particularly the case if you do not envisage Australia as being your place of retirement.

The benefits of participation in an International Retirement Plan typically include:  

• Investment earnings being generated in a low, or no tax, regime.

• Portability, with expatriates potentially having the ability to remain members of a single fund throughout their working life in a variety of offshore locations.

• The flexibility to allow the expatriate to choose their own investment funds, or for an employer to appoint an investment manager.

• Relatively simple, outsourced, online administration for employers which still allows them to determine vesting and retirement guidelines.

Before deciding to pursue such an option - whether as a substitute for Australian superannuation or as a “top up” in addition to contributing to those funds - you must receive professional advice to ensure that there is an appropriate fit for your circumstances.

If you ask why participation in these structures might be preferred to simply maintaining an overseas investment account, there are a number of potential tax planning advantages associated with foreign superannuation funds. If the superannuation fund is properly set up, on return to Australia the member's benefits may remain offshore and continue to grow tax free without attracting taxation under the Foreign Investment Fund provisions, including taxation of unrealised capital gains.

Broadly, to qualify for these tax-planning advantages the fund must fulfill the requirements of an employer-sponsored foreign superannuation fund. These funds are specifically provided for within Australian legislation, which require that the fund must be:

• Employer sponsored
• Foreign, and
• A superannuation Fund

We stress that professional advice should be sought prior to participation to ensure that all the legal and other requirements are addressed. Professional advice may be obtained through the Inquiry Form at the end of this page regarding the selection of an appropriate fund and any associated taxation issues.

Advice is also available for other nationalities who are considering investing in, or establishing, an international retirement fund.

Complete the Inquiry form