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  • FIRST POST
    • hillendale
    • By hillendale 9th Jan 19, 5:20 PM
    • 298Posts
    • 35Thanks
    hillendale
    Pension buyout whilst outside the uk
    • #1
    • 9th Jan 19, 5:20 PM
    Pension buyout whilst outside the uk 9th Jan 19 at 5:20 PM
    I have a pension plan with an old company I used to work for and left a number of years ago, I only worked for them for a few years so i will only receive a very small peppercorn monthly pension at retirement. So I recently contacted them to obtain a buy out figure and wanted to start to research my options with what to do with the buyout should I take it.
    My situation is I live and work in Canada now so not too sure what my best option would be with the buyout.
    Any help / advise welcome
Page 1
    • dunstonh
    • By dunstonh 9th Jan 19, 5:33 PM
    • 96,442 Posts
    • 64,333 Thanks
    dunstonh
    • #2
    • 9th Jan 19, 5:33 PM
    • #2
    • 9th Jan 19, 5:33 PM
    What do you mean by buyout? You cannot buy out a pension (as in being paid a lump sum prior to age 55)
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • xylophone
    • By xylophone 9th Jan 19, 11:22 PM
    • 28,008 Posts
    • 16,893 Thanks
    xylophone
    • #3
    • 9th Jan 19, 11:22 PM
    • #3
    • 9th Jan 19, 11:22 PM
    https://forums.moneysavingexpert.com/showthread.php?p=73359171#post73359171

    Presumably OP is now aged 47+.

    It looks like a deferred DB pension.

    He says that he can take it from age 50 but it is not clear whether this would be with actuarial reduction.

    I seem to remember that there is no approved Canadian QROPS?

    Presumably he could only take advantage of trivial commutation from age 55?

    But could take the company pension (PCLS and regular payment) from age 50?
    • Silvertabby
    • By Silvertabby 10th Jan 19, 12:27 PM
    • 3,632 Posts
    • 5,435 Thanks
    Silvertabby
    • #4
    • 10th Jan 19, 12:27 PM
    • #4
    • 10th Jan 19, 12:27 PM
    https://forums.moneysavingexpert.com/showthread.php?p=73359171#post73359171

    Presumably OP is now aged 47+.

    It looks like a deferred DB pension.

    He says that he can take it from age 50 but it is not clear whether this would be with actuarial reduction.

    I seem to remember that there is no approved Canadian QROPS?

    Presumably he could only take advantage of trivial commutation from age 55?

    But could take the company pension (PCLS and regular payment) from age 50?
    Originally posted by xylophone
    Depends on the scheme rules and dates of membership. In the case of the LGPS, for example, if the member has a GMP then trivial commutation can only be taken from GMP age (still 60 for a woman, 65 for a man).
    • hillendale
    • By hillendale 11th Jan 19, 1:52 AM
    • 298 Posts
    • 35 Thanks
    hillendale
    • #5
    • 11th Jan 19, 1:52 AM
    Pension
    • #5
    • 11th Jan 19, 1:52 AM
    Buyout may have been the wrong description,
    The pension company have sent me a statement with a transfer value.
    The original pension I have with them does offer me a pension (a very small peppercorn one in my case due to my short years of service at the company) from the age of 50 yrs or I can accept the transfer value and move it to a private pension fund.
    • Silvertabby
    • By Silvertabby 13th Jan 19, 2:16 PM
    • 3,632 Posts
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    Silvertabby
    • #6
    • 13th Jan 19, 2:16 PM
    • #6
    • 13th Jan 19, 2:16 PM
    Looks like all Canadian pension schemes have been removed from the QROPS list because of the new rules allowing Canadians access to their pension 'pots' at any age, typically for house purchase.

    HMRC rules won't allow your UK pension provider to transfer your benefits to a non-approved scheme, so that appears to be out of the window.

    If your pension benefits are as low as you say (and one person's definition of 'peppercorn' may not be the same as another persons) then it may be that your only option is to take your pension benefits from this scheme. You may be able to access these from 50, but that doesn't mean that they wouldn't be actuarily reduced for early payment, so you could to leave it until no reductions apply.

    A trivial commutation has been mentioned - ie, take the whole lot as a one-off lump lump with 25% being tax free and the remaining 75% classed as taxable income. Depending on the scheme rules, you may have to wait until you are 65 to take that option - and it will only apply if the total value of all of your UK private/occupational benefits is less than (currently) 30k. To find the notional value of your DB fund (for triviality purposes only) multiply your annual pension by 20 and then add on any automatic lump sum. 30K sounds a lot, but a tiny pension of just 125 per month with no automatic lump sum busts it. (125 x 12 = 1,500 per annum...... 1,500 x 20 = 30K).
    Last edited by Silvertabby; 16-01-2019 at 12:33 PM.
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