Montfort International, a Guildford, England-headquartered advisory firm which has specialised in UK pension transfers to Australia and New Zealand, is urging “former members of UK pensions who transferred to a Qualifying Recognised Overseas Pension Scheme (QROPS) [at] any time since 2006 to urgently review the pension advice they were delivered” that resulted in their ultimate decision to move their pension.
Montfort managing director Geraint Davies, pictured below left, said the company was taking the usual step of formally urging retail clients to revisit their contracts because of the emerging evidence that many of those making these transfers over the past 11 years had been given poor advice.
He noted that one of the advantages of a raft of new rules being introduced by HM Revenue & Customs which govern the way pensions may be transferred abroad in the future is that there will now be “significant tax punishment” if those advising on the transfers get their advice wrong.
Davies, left, said he had been moved to take action after meeting with some “victims” of “appalling QROPS advice” recently.
“These victims had been subject to a particular scam that has been estimated [to have affected] between 2,000 and 2,500 individuals,” he added.
He noted that like HMRC, the UK’s regulator, the Financial Conduct Authority, has also begun taking an increased interest in UK- authorised firms with overseas interests, in response to the emerging problems with historic bad advice.
He predicted that after HMRC suspends publication of its online list of schemes that attest to being registered overseas pension schemes on the second of June, head of the publication, on 5 June, of its updated list, “we expect significant reductions again” in the number of schemes, with losses most likely in “Australia, Guernsey, Jersey and the Isle of Man”.
As reported, the online ROPS list, which is a closely-monitored resource for those in the pension transfer industry, has had a history of being updated with large numbers of schemes deleted – in a few cases, every scheme, or nearly every one, in a single jurisdiction. In May, the last US scheme disappeared, weeks after the last Canadian scheme vanished. Also removed this year were the last schemes in Italy and France.
In April 2015, HMRC stunned the UK and international pensions transfer industry when it ruled that that all but one Australian scheme failed to meet the new ‘Pension Age’ standard, and removed some 1,653 Australian ROP schemes from its list. (There are now 355 schemes.) Three years earlier, it de-listed around 300 Guernsey schemes, leaving just three.
To see the current ROPS list, click here.