The Lemon Fool

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.

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

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.

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.

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

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.

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?

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.

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,

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.

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

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.

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.

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.

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.