The writing was on the wall for Australia Qualifying Recognised Overseas Pension Scheme (QROPS) late in 2014 – but no one saw what was coming.
December 19, 2014 – Consultation opens:
The British government opened an industry consultation on amending the qualifying rules for QROPS by aligning them with other UK legislation introduced under a major overhaul of pensions.
This overhaul allowed the government to start flexible access ‘spend as you like’ pensions in April 2015.
April 6, 2015 – Pension age test introduced:
The pension age test is simple – since the Finance Act 2004 received royal assent, no one aged below minimum pension age could draw from their retirement savings unless a doctor confirms physical or mental illness males them unable to continue working.
The minimum pension age in the UK is 55 years old.
However, Australian superannuation funds can pay out to under 55s under several circumstances – mainly if the retirement saver is suffering financial hardship or on compassionate grounds.
April 17, 2015 – Providers quizzed over qualifying rules:
HM Revenue & Customs (HMRC) sends a letter to Australia QROPS providers asking them to check if they passed the pension age test and if so, to give the details.
At this time, HMRC is believed to have thought no Australian QROPS superannuation scheme could ever qualify as a QROPS because Australian law required they must pay out to under 55s if the retirement saver meeting certain conditions requested they do so
June 17, 2015 – Australia QROPS delisted:
1,650 Australia QROPS were barred from accepting pension relieved transfer from UK pensions because they failed a test introduced with new rules and many providers seemed to have overlooked the impact of this key test.
Just one scheme for local government workers was left open and that survived only because the pension age test exempts public service pension schemes.
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June 29, 2015 – delisting letter:
Australia QROPS providers start receiving letters from HMRC explaining their fund ceased to qualify as a QROPS from April 6, 2015.
September 15, 2015 – Superannuation 55+ deeds:
A handful of new Australia QROPS were included on the new HMRC QROPS List. The trust deed for at least one of these QROPS only allows members over the UK minimum retirement age to join the scheme.
The work round bridges the gap between UK and Australia pension laws by stopping pension payments to under 55s.
Get Regulated Australian Financial Advice
If you are resident in Australia, you can still benefit from transferring to a QROPS. Fill out the Get Advice Form here to be connected to an Australian Regulated QROPS Pension transfer expert or you can download the free QROPS guide here to find out more