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UK pension transfer aids GESB members and grows FUM
GESB is now recognised as a qualifying recognised overseas pension scheme (QROPS) by Her Majesty's Revenue and Customs in the United Kingdom, which will help UK migrants transfer pension funds and boost GESB's overall funds under management.
Without the QROPS status, people who wanted to transfer pension funds out of the UK would face hefty tax charges of between 40 and 55 per cent of the funds being transferred, according to GESB general manager of wealth management Fabian Ross.
UK migrants who are members of non-QROPS funds tended to leave their money where it is, open a retail fund or start a self-managed super fund. That meant they would continue to pay two or more sets of fees, he said.
People with pensions in the UK often have no control over how it is invested, so bringing that money to an Australian fund gives them greater control and opportunity for growth, Ross added.
Transferring pension funds from the UK could be complex, and members should seek financial and/or taxation advice from a qualified adviser, Ross said.
Members need to determine the eligibility of a UK fund to be transferred to a QROPS fund, and Australian and UK tax implications also need to be considered, he said.
All current GESB members can transfer their UK pension to their current accumulation account, and members of GESB's defined benefit scheme, Gold State Super, will have their transfer paid to their existing West State Super or GESB Super account. If they don't already have one, a new GESB Super account will be opened so their UK pension benefits can be transferred to GESB, Ross said.
About one tenth of West Australians were born in the UK, and about 10,000 UK migrants arrive in Western Australia each year - with many taking jobs in the public sector and becoming members of GESB, according to Ross.
GESB estimated increases in FUM as a result of the qualification and interest to date has been strong, he said.
"Overall, being QROPS helps GESB to grow FUM by bringing new monies into the fund and in retaining members who already invest with GESB and want to bring their UK pension across in the future."
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