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KiwiSaver Schemes lose QROPS status

The following article is written by Jeremy Henderson from Henderson International Ltd the pension transfer specialist used by Hamilton Hindin Greene Ltd.

I can advise that KiwiSaver Schemes have lost their QROPs status, which has been back dated to 6th April 2015. They have been removed from the HMRC list of QROPS schemes

QROPS Schemes must not allow any withdrawals prior to age 55 apart from ill health. As Kiwi Saver schemes do allow withdrawals for financial hardship, permanent emigration from New Zealand and first home buyers before that age, their QROPS status has been removed. Here are the main points to take in account:
  

  • Any transfers approved by a UK scheme prior to 6th April 2015 are not impacted as they were made to a scheme that was an approved QROPS at this time.
  • There are restrictions on payments made from UK Pensions and tax penalties would apply if payments are made to non QROPS.  If funds are paid to a QROPS this is a permitted withdrawal. If funds are paid to a non QROPS penalties of up to 55% of the amount transferred could apply.
  • KiwiSaver balances can only be transferred to other KiwiSaver schemes and UK pension amounts can only be transferred between QROPS. The HMRC rule change means no KiwiSaver scheme currently has QROPS status so any transfer would be an unauthorised transfer which would incur penalties of up to 55% of the original QROPS transfer amount.
  • If KiwiSaver members meet the eligibility criteria under the KiwiSaver Act to make an early withdrawal, the Manager of the KiwiSaver Scheme, must comply with the legislation. KiwiSaver schemes are therefore unable to decline early withdrawals of UK pension transfers on the basis that they are unauthorised under the QROPs rules.

I understand that KiwiSaver scheme providers, industry groups, New Zealand regulators and HMRC are working together to seek a resolution to the issue, but there is currently no indication if and when this will be resolved.

If you have a KiwiSaver to which UK pensions have been transferred I recommend that you contact your provider in the first instance to find out your situation and the rules as they see them. If you are considering transferring your UK pensions do please contact me to find out more about your UK Pension transfer options as we use a fully operational ROPS to receive UK pension transfers. Jeremy Henderson from Henderson International Ltd visit our website to order our Pension Guide www.hendersoninternational.co.nz

 

Add a comment2 Comments

Reply Jason | January 2nd, 2016 at 8:58am
Hi.
I transfered my UK Armed Forces pension over to an approved QOPRS scheme in 2010 to Sure Life & then in 2012 to Westpac & I'm also a NZ citizen.
As of April 2015 the UK government had declared that no kiwisaver scheme will have QORPS status. Dose this now mean that I can transfer my existing kiwi saver to another provider.
Recently I tried to transfer my existing kiwisaver from Westpac to ASB & was informed by ASB that I was unable to do this, because they are not QORPS qualified ? This has now become void under the new rules.
Since the new rule is now in effect, that no Kiwisaver will have QROPS status what are my options?
Regards
Jason.
Reply 4rx | April 9th, 2017 at 5:32am
Very good page. Thank you so much.

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