Bring your overseas pension home

MAS Head of Product (Investments), Dominic Davin, explains at the process for transferring overseas retirement savings to New Zealand. 

So many Kiwis have lived and worked in Australia or the UK during their lives, so it’s not uncommon for many of us to have accrued retirement savings in those countries. If this is you, you may be wondering, ‘Can I bring my funds back to New Zealand, rather than having pension pots in 2 different countries?’  

Transferring your Australia super funds 

For those who have superannuation still in Australia, there is helpfully a trans-Tasman agreement in place. In this instance, it’s mostly a matter of checking eligibility, filling in a form from an Australian complying superannuation fund and arranging to have the money transferred to your KiwiSaver scheme.  

While it can take a while, the process is usually relatively straightforward. There are some watchouts to be aware of, however, such as the money from an Australian-sourced scheme cannot be used for a first-home withdrawal in New Zealand. Once the money is in a KiwiSaver scheme, you will be able to access the funds at age 60 if you satisfy the Australian definition of retirement at that age. 

Transferring your UK pension funds 

When it comes to transferring a UK pension to New Zealand, things become slightly more complex. UK pensions can only be transferred to schemes that have been accredited as a Qualifying Recognised Overseas Pension Scheme (QROPS), meaning they are recognised by  His Majesty’s Revenue and Customs (HMRC) in the UK. 

KiwiSaver schemes are no longer QROPS accredited, but some other retirement funds in New Zealand are, including the MAS Retirement Savings Scheme. It is worth noting that UK pension funds that previously had been locked into KiwiSaver schemes can now be transferred to a QROPS accredited scheme. 

What are the pros and cons of transferring a UK pension to New Zealand? 

Well firstly, it’s worth being aware that there are multiple phases to this process, from filling in transfer forms, to supplying identification and carrying out additional risk assessments, including, in some instances, interviews with a UK financial adviser. With several steps involved, it can be a lengthy procedure. To help you get started you can contact a MAS Adviser.  

Despite the effort involved, there are some key reasons for choosing to transfer your UK pension to New Zealand once you have moved home. Perhaps, most importantly, it means you will have your retirement funds consolidated in one place, in the country where you permanently reside. There are some New Zealand tax implications for money that remains in the UK after a certain period, which Members may want to seek tax advice on. 

An important call-out is that once money is transferred to New Zealand, it can’t be reversed back to the UK, and there are penalties if you then leave New Zealand again within 10 years of that money arriving. If, however, you are a permanent resident of New Zealand and intend to be so for the foreseeable future, then transferring your funds so they are in the currency of the country you live in could give you a greater sense of control and help reduce the risk of currency fluctuations at the point of retirement. 

Finally, it’s worth noting that not all UK pension funds can be transferred. In particular, transfers from unfunded public pension schemes such as the National Health Service (NHS) are generally not permitted. Also, Members with ‘safeguarded’ benefits – some form of guarantee or promise about the rate of secure pension income that the Member (or their survivors) will receive or have an option to receive – may need to receive UK financial advice before the funds are released.  

Members will need to check with their UK providers to understand whether it’s possible, the specific steps involved in the process, and any transfer fees involved.  

Chat with a MAS Adviser 

Everyone’s financial journey is different, and we’re here to help our Members create the financial future that is right for them. If you would like to chat with a MAS Adviser, phone 0800 800 627 or email info@mas.co.nz. 

Medical Funds Management Limited is the issuer and manager of the MAS KiwiSaver Scheme and the MAS Retirement Savings Scheme. A PDS for each Scheme is available on our website.  

This article is of a general nature only and is not intended to constitute financial or legal advice. MAS is a licensed financial advice provider. See our financial advice disclosure statement or call 0800 800 627.