18 September, 2014

Pension Transfers into Australia

Pension Transfers to Australia from the UK and Overseas - The Fixed Price Alternative
 

If you are an Australian expatriate returning to Australia, or a migrant to Australia, you are likely to have built up foreign pensions in one or more countries – with common examples being the UK, US, Canada, South Africa and Europe. These private or corporate pensions can often be transferred tax effectively into Australian superannuation - although this not possible with Government or State pensions.

Until now, the transfer process into Australia from the UK, the major source of transfers, has been dominated by firms charging a percentage of total funds transferred  – sometimes as high as 5% of funds. We offer to manage a single transfer on a fixed fee basis as provided in the table below. Compare our fees to those firms who charge between 2.5% and 5% of the fund balance - their fees can equate to between $5000 and $10,000 on a transfer value of $200,000. 

SERVICE
COST
(inclusive of GST)

Pension Transfer

Complete administration of the pension transfer process, including obtaining a Current Estimated Transfer Value, completing all transfer documentation as required by UK and Australian pension funds, and advising on the clearance of any money transfers.

 

$1500

What is Not Included

The service does not include:

  • Tax or Actuarial advice. If you have been resident in Australia for more than 6 months prior to the pension transfer being completed then you may be liable for Australian tax on the growth in the value of the fund from the date of residency. You will have some options in terms of how this tax is liability is treated and professional advice will be required to both calculate the tax payable and the most tax effective way of dealing with the liability. Actuarial advice may be required where you have a defined benefit/final salary scheme and need to determine a value at the date of residency which is going to be accepted by the ATO. Exfin can provide access to appropriate tax and actuarial advice - with fixed fees quoted in advance.
  • Transfers involving large amounts - currently defined as sums exceeding AUD540,000 - require multiple transfers and involve very much more complicated tax and financial considerations. These require specific professional advice and we would arrange for you to have an initial discussion with a specialist financial planner and thereafteran individual fee quotation.
  • Advice on either the selection of a superannuation fund or investment advice.  We can however arrange for this to be provided by experienced, independent advisors who are paid on a fee for service basis and have no vested interest in the selection of particular products or services except their suitability for your individual requirements. You would receive a quote in advance for any work or advice required and you would not be subject to any commitment. Note that, unlike some other providers, our approach means taht you may transfer your pension fund into any superannuation fund you nominate.
  • Please note that it is our view that individuals should receive professional advice in advance of making any decision to transfer a final salary or defined benefit scheme. We will not transfer these schemes on a pure execution basis.

Transfers from Other Countries

The fees attaching to the transfer of funds out of countries other than the UK, and into countries other than Australia, will be very dependent on individual circumstances and individual quotations will be provided on request. We have however prepared some notes on the issues surrounding the transfer of 401(k)'s and IRA's from the United States. Also note that in the right circumstances (early) withdrawals can be made from both IRA's, 401(k)'s and Canadian RRSP's on concessional terms - with withdrawals available for deposit into Australian superannuation or for other purposes. Transfers may also be arranged from countries such as Ireland and South Africa.  In terms of Ireland, recent restrictions have however impacted on how pensions can be transferred - with the result that only relatively large balances can be economically transferred.

An Overview

We operate on the basis that individuals should have a working knowledge of the pension transfer process so that they can have an intelligent dialogue with advisers regarding both the merits of any transfer and the process itself.  Within this section of the website we have attempted to address many of the issues involved in a transfer, and provide an overview in the following pages:

IMPORTANT: The material contained in this website and other associated communications is only intended as general, background information and must not be relied upon. No warranty is provided in relation to any material or to the services that may be contracted through exfin.com. It is recommended that individuals seek the advice of qualified professionals before taking any action.