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Personal Pensions in the EU

Snorvey
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Personal Pensions in the EU

#138077

Postby Snorvey » May 10th, 2018, 2:05 pm

Like thousands of British retirees living in European Union countries, Barlow, 72, could lose access to his private pension unless U.K. and European negotiators reach a deal that allows the payments to continue after Brexit. With less than a year before the official exit date, the two sides haven’t even started discussing the issue of cross-border financial services, leaving pensioners like Barlow unsure about the future.

It goes on to say

Without a deal, insurers and pension providers would be legally barred from sending out payments, leaving policies dormant on their accounts. The government of Prime Minister Theresa May currently isn’t even pushing to retain passporting rights after Brexit and U.K. financial companies have largely given up hope that it will be part of a final deal.

....and

One solution for U.K. firms would be to transfer policies to a subsidiary based within the EU. However, such a restructuring would cost millions and involve court processes and legal opinions, according to Webb.

Insurers could end up caught between breaching contracts by not honoring their promises to policy holders or breaking European law by continuing to make the payments.


From Bloomberg. Free registration may be required.

https://www.bloomberg.com/news/articles ... ter-brexit

Alaric
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Re: Personal Pensions in the EU

#138081

Postby Alaric » May 10th, 2018, 2:15 pm

Snorvey wrote:[i]Without a deal, insurers and pension providers would be legally barred from sending out payments, leaving policies dormant on their accounts.


What law would that be then? The UK is currently part of the EU. Those with UK policies retiring to non-EU countries aren't barred from receiving pension payments, neither are those in receipt of pensions from outside the EU prohibited from receiving them in the EU. The EU doesn't have a monopoly on international flows of money.

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Re: Personal Pensions in the EU

#138116

Postby Snorvey » May 10th, 2018, 4:25 pm

What law would that be then?

I don't know. I didn't write the article.

Dod101
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Re: Personal Pensions in the EU

#138127

Postby Dod101 » May 10th, 2018, 5:16 pm

This sounds like utter nonsense. How could anyone be barred from receiving private pension payments when the State Pension appears to be scattered round the world?

Dod

PinkDalek
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Re: Personal Pensions in the EU

#138128

Postby PinkDalek » May 10th, 2018, 5:19 pm

Dod101 wrote:This sounds like utter nonsense. How could anyone be barred from receiving private pension payments when the State Pension appears to be scattered round the world?

Dod


The article is about private pensions but covers the State Pension issue < there isn’t one.

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Re: Personal Pensions in the EU

#138131

Postby swill453 » May 10th, 2018, 5:37 pm

Looking at https://www.pensionwise.gov.uk/en/living-abroad
Living abroad and your pension

If you live abroad, or plan on retiring abroad and have a defined contribution pension in the UK, you can either:

- leave your pot in the UK and take your money from abroad
- move your pension pot abroad

You can also mix these options, eg leave one pension in the UK and move another abroad.

Taking your pension from abroad

If you leave your pension pot in the UK, you have the same UK pension options.

UK pension providers don’t usually pay the money from your pension straight into overseas bank accounts. If they do, they may charge fees. Check with your provider.

Alternatively, you can ask your provider to pay your pension into a UK bank account. You could then withdraw the money with your debit card from abroad, or transfer the money yourself into a foreign account.

I really don't see that there would be any issues with DC pensions whether we're in the EU or not.

Scott.

JamesMuenchen
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Re: Personal Pensions in the EU

#138164

Postby JamesMuenchen » May 10th, 2018, 8:37 pm

I think it's true actually, strange as it sounds.

Paying out a pension is clearly an insurance transaction.

And to transact insurance business, for instance in Germany...
You either have passporting:
https://www.bafin.de/EN/Aufsicht/VersichererPensionsfonds/Zulassung/EU-EWR-Versicherer/eu_ewr_versicherer_node_en.html
or you need German Authorisation, and be subject to German supervision:
https://www.bafin.de/EN/Aufsicht/VersichererPensionsfonds/Zulassung/zulassung_node_en.html
https://www.bafin.de/EN/Aufsicht/VersichererPensionsfonds/Zulassung/InlaendischeVersicherer/inlaendische_versicherer_node_en.html
The links are in German but the contents are in English

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Re: Personal Pensions in the EU

#138167

Postby swill453 » May 10th, 2018, 8:47 pm

JamesMuenchen wrote:I think it's true actually, strange as it sounds.

Paying out a pension is clearly an insurance transaction.

In what way is a typical DC pension* anything to do with insurance?

(I'm assuming annuities aren't involved)

Scott.

Alaric
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Re: Personal Pensions in the EU

#138188

Postby Alaric » May 10th, 2018, 9:45 pm

JamesMuenchen wrote:I think it's true actually, strange as it sounds.


The problem, if there is a problem, would have existed prior to the single market. The simple solution is that the person in receipt of a UK pension payment has it paid into a British bank account and arranges their own transfer.

I don't actually think being in receipt of a lifetime benefit counts as an insurance transaction, but lawyers will argue that white is black. Are all non-EU pension payments banned in Germany?

swill453
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Re: Personal Pensions in the EU

#138191

Postby swill453 » May 10th, 2018, 9:51 pm

Alaric wrote:I don't actually think being in receipt of a lifetime benefit counts as an insurance transaction, but lawyers will argue that white is black.

These days I doubt if many DC pensions could be called a “lifetime benefit” anyway. It’s a pot of money, that you spend, potentially with some overall tax saving.

Scott.

JamesMuenchen
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Re: Personal Pensions in the EU

#138202

Postby JamesMuenchen » May 10th, 2018, 10:51 pm

swill453 wrote:
JamesMuenchen wrote:I think it's true actually, strange as it sounds.

Paying out a pension is clearly an insurance transaction.

In what way is a typical DC pension* anything to do with insurance?

(I'm assuming annuities aren't involved)

Scott.

According to the German act I linked to
Pension funds have also been subject to insurance supervision by BaFin under the Act since the beginning of 2002,

swill453
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Re: Personal Pensions in the EU

#138204

Postby swill453 » May 10th, 2018, 11:19 pm

JamesMuenchen wrote:According to the German act I linked to
Pension funds have also been subject to insurance supervision by BaFin under the Act since the beginning of 2002,

Nothing in my SIPP, its management or its payouts bears any relation to a "pension fund" in that context. And the provider is not an "insurer".

Scott.

pochisoldi
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Re: Personal Pensions in the EU

#138207

Postby pochisoldi » May 11th, 2018, 12:24 am

swill453 wrote:
JamesMuenchen wrote:I think it's true actually, strange as it sounds.

Paying out a pension is clearly an insurance transaction.

In what way is a typical DC pension* anything to do with insurance?

(I'm assuming annuities aren't involved)

Scott.


You are thinking about the current UK pension situation where you can drawdown, pay more tax and keep the economy afloat.
Meanwhile back in Europe, a DC pension is still predicated on the money being used to buy an annuity.

And for anyone wondering why an annuity is insurance - "Life assurance is insurance against dying early. An annuity is insurance against dying too old". Hence the reason why until the mid-80's the "life house" was a licence to make money - sell life insurance, sell annuities, get the rates right, and then accept payments into and make payments out of the same pot. - hence the reason why actuaries made a packet.

PochiSoldi

JamesMuenchen
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Re: Personal Pensions in the EU

#138210

Postby JamesMuenchen » May 11th, 2018, 1:25 am

swill453 wrote: Nothing in my SIPP, its management or its payouts bears any relation to a "pension fund" in that context. And the provider is not an "insurer".

Scott.

Good for you.

But according to the article in the OP:
There are 38 million people living in Europe outside Britain who have policies with U.K. insurers, according to Nicky Morgan, chair of Parliament’s Treasury Committee. That includes many expatriates with private pensions who are covered under so-called passporting rules for financial companies that probably won’t survive the cut after Britain leaves.

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Re: Personal Pensions in the EU

#138211

Postby Alaric » May 11th, 2018, 1:59 am

JamesMuenchen wrote: That includes many expatriates with private pensions who are covered under so-called passporting rules for financial companies that probably won’t survive the cut after Britain leaves.


Surely it's always been possible to take an income from a UK pension scheme when living in Europe and will continue to be so? If there's an assertion otherwise, it would equally apply to the 150 countries or more that are not and never have been members of the EU.

Reciprocal pension rights are likely to have far more to do with double taxation than with passporting, which was always to do with whether you could market ("sell") financial services across the EU.

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Re: Personal Pensions in the EU

#139213

Postby JMN2 » May 15th, 2018, 4:37 pm

I've read that pension systems inside the EU are not uniform. For instance my case, my Finnish pension forecast shows a princely sum of around 50 euros I am entitled to per month at state pension age. If I am not tax resident in Finland then I wouldn't get the state pension but would get this 50 a month, it is what I have contributed into the system above the state pension entitlemet and is not based on qualifying years but amount of NI I have paid (which is related to the size of salary). Inside or outside EU doesn't matter, the Finnish centralised pension system will wire it to me.

Edit: actually the state pension bit is a bit more complicated, it would be paid intoanother EU/ETA/Switzerland if the payments started while still a Finnish tax resident+ other complexities.

alonzo
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Re: Personal Pensions in the EU

#146516

Postby alonzo » June 18th, 2018, 7:53 pm

as long as your pension is a private one, the place you live in is irrelevant. All this might be relevant to state pension.

But, there maybe an issue with taxes when receiving pension abroad.


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