IFA & Pension Company Error

patchndandy

Hi,
My wife & I relocated to Norway back in 2005. As I was to continue operating through my Ltd. company (+ filing UK tax returns) I had expected to be able to continue contributing to my EPP. After informing the pension company of the relocation I was informed that due to a change in legislation I would not be able to continue to contribute. They gave me two options, I could either have the whole fund transfered to a company that complied with cross boarder legislation or convert to a paid up status and have the contributions returned which were paid whilst I was out of the UK. After refering the matter to my IFA, who apparently met with the pension company, the decision was final. I took the latter option.
I was never happy with this situation so I contacted TPAS (the pensions advisary service). After some initial investigating, if this was correct, I should have been able to continue making contributions up to 5 years after relocating. Further investigation revealed that as Norway isn't a full member of the EU the legislation that the pension company was using could only begin after April 2007 and not from Dec. 2005.
Can anyone help?
Thanks,

dunstonh

You appear to be mixing up legislation and pension rules. The cross border legislation takes priority over the pension contribution rules. (although some of your dates dont seem to match)

If the firm hasnt taken on authorisation to allow passporting then they can only transact business to UK residents (or face to face transactions for non residents - although a provider taking direct business wont often allow this unless an IFA takes the business but some direct companies dont recognise business from IFAs). This law came into effect 1st Nov 07.

So, whilst you are eligible to pay into a pension upto 5 years, you are not able to do it with that particular scheme as they are not authorised to transact with non-residents.

Its a bit similar to say someone with a stakeholder pension wanting to do income drawdown. The stakeholder provider wont do it and wont make it available as an option. However, other providers can. The rules allow it to be done but the provider doesnt have to allow it. And that applies to you. This provider couldnt do it but others could.

patchndandy

Hi Dunstonh,
Thanks for the reply. I just wish that the dialog with my pension company & my IFA had been this easy. All I got from them was either silence or clause/rule numbers quoted - no english! Hence TPAS.
You raise several interesting issues which confuses me. How can an EEP which is run in the name of a UK company suddenly be forced to stop contributing when the employee works in another country? Even though I was forced to be come UK non-resident because of situation, does not mean that it is a permanent move and I believe that the 5 year ruling is aimed for this temporary, all be it lengthy, relocation.

The contributions are paid via the UK company not from the employee. Suddenly this is ignored?

It also highlights that pensions are out of date with modern working practices. More and more people are working in alternative countries to which the pension was originally started. Pensions are always a long term investment, riding out the bad times and hoping that in the end you hit it good. Your average Joe can't keep starting new pensions just because the company doesn't like dealing directly with the policy holder.

If pension company's are reluctant to accept that the modern work force has, as Mrs. Thatcher put it, got on their bikes, then they should state the clause that they will only pay out in the currency of the country that the policy was started in. It is then down to the named policy holder to choose were he lives. Not refuse to accept contributions.
Thanks,

patchndandy

Hi Dunstonh,
Thanks for the reply. I just wish that the dialog with my pension company & my IFA had been this easy. All I got from them was either silence or clause/rule numbers quoted - no english! Hence TPAS.
You raise several interesting issues which confuses me. How can an EEP which is run in the name of a UK company suddenly be forced to stop contributing when the employee works in another country? Even though I was forced to be come UK non-resident because of situation, does not mean that it is a permanent move and I believe that the 5 year ruling is aimed for this temporary, all be it lengthy, relocation.

The contributions are paid via the UK company not from the employee. Suddenly this is ignored?

It also highlights that pensions are out of date with modern working practices. More and more people are working in alternative countries to which the pension was originally started. Pensions are always a long term investment, riding out the bad times and hoping that in the end you hit it good. Your average Joe can't keep starting new pensions just because the company doesn't like dealing directly with the policy holder.

If pension company's are reluctant to accept that the modern work force has, as Mrs. Thatcher put it, got on their bikes, then they should state the clause that they will only pay out in the currency of the country that the policy was started in. It is then down to the named policy holder to choose were he lives. Not refuse to accept contributions.
Thanks,