Pensions  

Pension transfer loophole to close next month

Pension transfer loophole to close next month

Rules to close a pension transfer loophole will come into effect on Monday 7 September, HM Treasury has announced.

The Treasury has laid a statutory instrument before parliament which will close the loophole in rules introduced on 6 April allowing transfers from unfunded public service pension schemes to non-occupational Qrops, in the UK or abroad, based on defined contributions or flexible access arrangements.

A Treasury spokesman said: “Transfer restrictions from unfunded public service pension schemes should apply to transfers to qualifying recognised overseas pension schemes, including those based in the European Economic Area.

“This is why we have recently laid legislation to this effect.”

Teachers’ Pensions is taking action based on this new information, and said it was writing to members whose application to discharge their benefits to an affected EEA Qrops was received on or after 6 April.

Adviser view

James McLeod, head of pensions at global firm AES International, said: “This little episode on transfers highlights the danger of rushing legislation through parliament, and is likely to have been very frustrating for anyone trying to transfer during this time.”