Overseas Pension Advice
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Learn How To:
- Locate your overseas pension
- Get up to date documentation and fund valuation
- Analyse whether or not it makes financial sense to transfer
- The Tax implications of transferring it from the residing country of pension
- Enquiring about any double taxation agreements between Ireland and the foreign jurisdiction
- How to transfer the pension to Ireland
- How and when this pension can be accessed/retired
- The possibility of transferring your foreign state pension entitlement credits to increase your Irish State pension entitlement.
THE MAIN BENEFITS OF TRANSFERRING YOUR PENSION BACK TO IRELAND ARE
If you are someone who has worked abroad and have not yet transferred your pension, it may be worth your while to look into this in greater detail. It is however, very important that you do your homework before any decision is made as it may or may not be the best decision for you. In some circumstances, the tax implications of transferring it to Ireland may be too significant. Alternatively, in other circumstances, there may be a way of claiming a tax rebate from this foreign jurisdiction on the tax paid as a consequence of a double taxation agreement between Ireland and that country.
Some of the possible benefits of transferring your pension back to Ireland include:
- The possibility of getting an Enhanced Transfer Value on your pension, particularly if this overseas pension is a defined benefit pension.
- It may also be possible for you to get access to this pension money from age 50 onwards. It can be age 55 with some countries (UK).
- It can reduce currency risk once it is transferred into Euro. This is especially relevant for people who worked in the UK due to the uncertainty around Brexit and the impact it will have on the British pound versus the euro.
- The individual has full control over this money once It's transferred. The individual can invest this wherever he/she wants within Revenue rules. It's even possible to use this money to buy property or invest in a company, etc.
- The main benefit of transferring your pension is that, upon death, your full pension value is left as inheritance to your loved ones. This is not necessarily the case if the pension is left where it is.
Overseas Pension Advice
How does this overseas pension transfer process work
If you decide to transfer your overseas pension to Ireland, the transfer value (provided by your previous employer) is transferred to Ireland and into either a Personal Retirement Bond or a PRSA.
All Pension providers have these pension vehicles (Zurich/Aviva/Royal London/Irish Life/Standard Life/New Ireland Assurance).
Please see the illustration next to this section. Further details are provided below.
Once the money has been transferred from your ex-employer to Ireland, you have the option of retiring and accessing your Personal Retirement bond (age 50)/PRSA (age 60). Your funds will be accessed as follows :
- 25% of the pension value may be received as a tax-free lump sum
- The remaining 75% is usually transferred into an Approved Retirement Fund, or ARF
- Withdrawals from an ARF are taxable as income
- A minimum withdrawal of 4% is compulsory from age 61 and must be made each year
- From age 61 onwards, you may decide whether to withdraw more than the minimum amount, depending on your needs and tax position
other features and benefits
State Pension Entitlement in Ireland and abroad
In order to be entitled to a state pension entitlement in either Ireland or a foreign country, you need to have paid taxes to entitle you to a pro rata state pension. In Ireland these contributions are call A1 PRSI contributions.
There was a rule change in September 2022 State Pension Entitlements. There has been a move to a Total Contributions Approach (TCA) as a basis for calculating the quantum of the state contributory pension. You will need 40 years contributions to get the full amount, and anything less is pro rata.
State pension entitlements from foreign jurisdictions can be transferred to Ireland to entitle you to a higher state pension entitlement here if you so please. The combination of all the above, when transferred could entitle you to a full state pension entitlement. Alternatively, you can keep these state pensions separate.
Get in touch with us
To schedule a call with one of our Qualified Financial Advisors.