What are the QROPS Limits for Pensions Overseas?
For pensions overseas to accept transfers in from a UK pension scheme, the receiving scheme must be a Qualifying Recognized Overseas Pension Scheme (QROPS). In order to be granted QROPS status, the overseas scheme is required to make payments in accordance with the UK rules.
- Can not be made to the member before age 55 (from April 2010).
- Can not provide greater than 25% of the transferred fund as a lump sum.
- The income provided by the balance 75% of the fund, would have to be paid in accordance with UK regulations.
The income that can be payable from pensions overseas, in respect of a UK transfer, for members with less than 5 years of residency outside of the UK, must not exceed the benefits that would be paid from a UK scheme.
In other words, any payments made directly from the scheme must be within the UK Unsecured Pension (USP) limits – formerly known as income drawdown – as prescribed by the UK Government Actuary Department (GAD).
For members who are 75 or more, the Alternatively Secured Pension (ASP) limits, apply.
For UK pension members already in USP, a transfer to a QROPS is still possible. However, if tax-free cash will already have been taken from the UK pension before transfer, no further tax-free cash payments will be permitted from the QROPS within the reporting period.
