Ireland Fact-File Part 7:
Business Owner Welfare and Lifestyle
7.3 Ireland Offshore and International Pensions
International and offshore pension schemes
Pension Portability
Private pensions (and their portability, or lack thereof)
are a notoriously complex area, and expert advice should certainly
be sought in this area before leaving Ireland. If you are
only intending to leave Ireland for a relatively short time,
a key area to discuss, however, may be the tax implications
of continuing to contribute to an Irish fund whilst overseas,
and the earnings accrued by this fund in your absence.
With regard to social security, and whether any benefits
can be obtained in other countries, this will obviously depend
to a great extent on the destination country!
In countries covered by EU and EEA regulations (at the time
of writing: Austria, Belgium, Bulgaria, Cyprus, Czech Republic,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Latvia,
Lithuania, Malta, Norway, Portugal, Poland, Romania, Spain,
Sweden, Switzerland, Slovakia, Slovenia, Netherlands, and
the United Kingdom (including the Channel Islands and the
Isle of Man), an Irish resident moving there will usually
be treated in the same way as the country's own residents.
If you are moving to one of the aforementioned countries,
then, you should fill in forms E104 and E301, which will provide
details of your social security record whilst in the Republic,
should you need to make a benefits claim.
On the issue of transferring pensions overseas, the Pensions
Board (which has responsibility for overseeing occupational
pensions and PRSAs), says the following:
“The Occupational Pension Schemes and Personal Retirement
Savings Accounts (Overseas Transfer Payments) Regulations
2003 (S.I. 716 of 2003) contain the requirements that must
be adhered to prior to an overseas transfer being effected
under section 34(2) or 124(2) of the Pensions Acts. The following
is a summary of those requirements:
- The trustees or PRSA provider are required to obtain written
confirmation from the trustees, custodians, managers or
administrators of the overseas arrangement, to which the
transfer is to be made, to the effect that the overseas
arrangement provides "relevant benefits" within
the meaning of section 770 (1) of the Taxes Consolidation
Act, 1997, and
- The trustees or PRSA provider must be satisfied that the
overseas arrangement is approved by an appropriate regulatory
authority for the country concerned, and
- The trustees or PRSA provider of the Irish arrangement
must obtain from the member of the arrangement or the PRSA
contributor wishing to make the transfer such information
as may be approved by the Pensions Board."
Under the IORPS Directive (2003/41), Institutions for Occupational
Retirement Provision are permitted to be established in one
member state whilst providing benefits in other EU countries,
meaning that pan-European pension funds can manage the schemes
of workers in different EU countries.
However, from the point of view of a business owner relocating
to the Republic from another country and looking to provide
for their retirement, it is sometimes possible to ensure continuity
in this area, but (as is often the case with regard to pensions),
the situation is usually far from straightforward.
QROPs (Qualifying Recognised Overseas Pensions Schemes) are
a relatively new development in the area of pensions in the
UK, and are designed for those who have contributed to a UK
pension scheme, but are now living elsewhere (Ireland, for
example) as an expatriate, and have terminated their residence
in the country.
For the first five years after transfer, the QROPS provider
is obliged to report transfers and payments to HM Revenue
and Customs, but after that period, the various tax benefits
of the retirement scheme can be taken according to the rules
of the country in which it is established; generally with
more favourable tax consequences than in the UK, as QROPs
providers have tended to establish themselves in countries
that tax pension benefits minimally.
In addition, QROPS offer greater flexibility compared to
their UK counterparts, with the pensioner not obliged to purchase
an annuity at 75 (or face a tax penalty for not doing so),
meaning that the assets can be invested elsewhere, and a greater
proportion of the pensioner's wealth can be passed on to his
or her beneficiaries.
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