Pension fund transfer from Norway

Mrmadscientist

Good afternoon,

I have a question, which so far I have not been able to find an answer for.
I am in the process of being made redundant by the company I work for, who are based in Haugesund in Norway. They have been collecting pension contributions for the last 6 years such that, when we could setup a UK company we could establish a UK works based pension and transfer the money to that entity. The UK company was set up but we encountered problems obtaining a bank account due to the somewhat complex structure of the parent holding company in Norway. Obviously as the UK arm has been made redundant (2 employees) there will be no bank account here. As part of our redundancy package they have calculated the size of the funds owed to us and will transfer it to us when our notice period ends on 31st August 2026.The problem I have now encountered is that my personal pension with prudential says they will not accept payments from overseas banks and further said that the money will have to be paid directly to me and then I have to then make a "personal" contribution to my pension fund.The money, in the company accounts is identified on their balance sheet as "pension liability" and if paid directly to me (for transfer to Prudential) will surely be liable for tax, where it obviously shouldn't be. So far the accountants we use here have not come up with a solution to the problem so I was wondering if anyone here has encountered such issues before and may possibly know of a transfer mechanism that can be employed in such cases.
Many thanks,

Woodstok2000

Can't you claim tax relief on your contribution though, so it should even out? I guess it depends on the total amount and if youre going to hit any contribution or tax reclaim limits as a result.

You won't get NI back I don't think, so that would be a loss. The employer would be liable for NI too maybe? Have they accounted for that?

Marcon

It's not easy to follow what's being going on, but from the sound of it you aren't transferring a pension at all - just funds which your Norwegian employer has earmarked as 'pension contributions' but without doing anything with these contributions. That doesn't sound as if it has been compliant with auto-enrolment legislation if you're working in the UK under UK employment laws.

Maybe kick this one back to the Norwegian employer and suggest they get the necessary advice from someone familiar with international pensions - or at least suggest they pick up the tab for you to get the advice, which isn't going to be cheap.

Bostonerimus1

On your pay slip (electronic or otherwise) how has this pension money been characterized? Have you been paying NI? Are you sure you were a salaried employee of a UK company or a contractor to the Norwegian company?

Albermarle

What they should have done is set up a UK company for their two UK employees. Then they pay money to that company, who in turn pays the wages of the employees, and other obligations such as paying employer NI and setting up and paying into a UK pension. Typically the company would have an independent accountant looking after the books, and being company secretary.

Alternatively the two employees are employed by a related UK company, who are part of the same group.

Both solutions are quite commonplace and work well.

Marcon

Both solutions are quite commonplace and work well.

…but neither was used by this particular employer, so not much help to OP!

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82061642#Comment_82061642

I thought it was useful for the OP to know what was more the norm when discussing the situation with his employer/looking for a way forward.

Marcon

Ah - fair comment. I think I'd (also) go for the breach of auto enrolment - these were UK based employees so had to be enrolled into a pension scheme before they could opt out, so they couldn't just have 'agreed' to this route.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82061693#Comment_82061693

I think the problem the OP will have, is that once not an employee, they will find it difficult to pursue their ex employer retrospectively. From my experience trying to get Directors of distant foreign companies to even react/respond to these kind of issues can be very difficult.

A legal battle will be messy and drawn out, so maybe some kind of enhanced pay off would be a better solution.