QROPS Flexible Access Questions For Expats

Thousands of Qualifying Recognised Overseas Pension Scheme (QROPS) savers will be barred from the new flexible access drawdown rules from April.

Only two QROPS jurisdictions have so far made any move to change local pension rules to align with HM Revenue & Customs (HMRC) flexible access rules.

Out of more than 3,600 QROPS in 45 financial centres, Gibraltar and Malta account for just 66 pensions.

The fear for many QROPS savers is whether their financial jurisdiction will let providers offer flexible access, and if they do, when will the provider be ready to implement the far-reaching reforms.

This leaves QROPS savers in a financial limbo and could disrupt their retirement plans if money they were relying on is still locked in a pension.

QROPS flexible access options

The stark choice then is whether to sit and wait for flexible access to start or to transfer QROPS savings to another financial jurisdiction.

However, both options come with a cost.

Waiting means losing financial opportunities and cash flow, while switching financial jurisdictions can be a costly and time-consuming process.

To help with making the important financial decision, here are some questions QROPS savers should be asking their providers now:

Will you offer flexible access from April 2015?

If the answer is yes, then ask what options are available and what, if any, charges will be imposed.

If the answer is no, savers need to ask if and when flexible access is going to become available.

Should the provider blame the local pension regulator for failing to amend legislation to allow flexible access, then contact the regulator and ask what their timetable is for introducing the new reforms.

Will you offer the full range of options under flexible access?

The new rules allow pension savers to draw down all or some of their fund, but some providers are readying to offer full drawdown only.

QROPS savers need to know what their drawdown options under flexible access and should not assume their provider will have the customer service and back office facilities in place to offer the full service.

If flexible access is unavailable, what are my transfer options?

Ask for a transfer value of the current pension pot, a detailed list of charges that may apply to a transfer and a timescale.

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