Taking benefits from ex-UK pension funds
The UK tax authority permits pension benefits paid by a QROPS to be unlimited from the age of 55, and i-Select permits up to 100% of the fund to be taken as benefits in this way.
However, Exit Fees may apply to withdrawals in excess of 30% of the original contribution to the Scheme up to 30 June 2019, or within two years of your original contribution (if later).
The Exit Fee applies if funds in excess of 30% of the original contribution amounts that are subject to the ROPS rules are taken as lump sum benefits within a two year period (the amounts caught by the Exit Charge are called “Relevant Contributions” here, and the time that they are potentially caught by Exit Fees is called the “Relevant Period”). The Exit Fee is 3% if Relevant Contributions are taken as lump sum benefits within 12 months, and 1.5% if taken as lump sum benefits between 12 and 24 months.
Part of any Exit Fee will be paid to your Financial Adviser unless they elect to waive it. Where your Financial Adviser elects to waive the payment, the Exit Fee will be reduced to 2.5% (within 12 months) and 1.25% (12 to 24 months) respectively.
Exit fees do not apply to contributions that are not subject to the ROPS rules, the growth on Relevant Contributions, or Income for Life Payments on Relevant Contributions.
30% lump sum and Income for Life
For members who qualify for benefits under the ROPS rules, if you wish to avoid Exit Fees, during the Relevant Period the scheme permits a one-off lump sum of up to 30% of the fund to be drawn, plus a generous annual income on the remainder.
Using New Zealand life expectancy tables and the New Zealand 10 year bond rate, the maximum and minimum income that may be drawn is provided by the calculator shown here. Members may choose any annual figure of income between the maximum and minimum figures, and may also choose the payment frequency.
Members may review their payment options annually.