GLOSSARY
 
 
Account Based Pension
 
 
An Account Based Pension is similar to an annuity but more flexible. There is no specified term, it keeps going until all capital has been paid out to you (or a beneficiary upon your death). Key features include:
  • you select how often and how much the payments are
  • flexibility to select your investment options
  • provided you receive at least the minimum pension amount each year (based on age), you can access your capital at any time
  • can be commuted at any time
  • upon death, the balance may be paid as a lump sum to a designated beneficiary or used to buy a further pension for a reversionary beneficiary.
 
Annuity
 
 
Upon retirement, the investment in your personal pension plan reaches maturity. You may wish to transfer its accumulated value into a regular income for the remainder of your retirement. This can be achieved through the purchase of an annuity which exchanges the final value of the pension fund into which you have been paying, into a regular income stream for the remainder of your life. Payment amounts depend on the accumulated value of your pension, expected future investment return, frequency of payments and life expectancy of the purchaser.
 
Concessional Contributions
 
Concessional Contributions are funds that are contributed into the superannuation environment before you have paid income tax on them. They are taxed at a 15% contributions tax rate as they enter the superannuation environment. These include:
  • employer contributions (including contributions made under a salary sacrifice arrangement)
  • personal contributions claimed as a tax deduction by a self-employed person
 
Non-Concessional Contributions
 
 
Non-Concessional Contributions are funds that are contributed into the superannuation environment after you have paid income tax on them. Pension transferred from foreign funds are classed as Non-Concessional contributions.
 
Generally Non-Concessional Contributions below the transfer limits are not taxed when entering the Australian superannuation environment and are tax free when withdrawn. However tax may or may not be applicable on a pension transfer depending on satisfying certain criteria.
 
Earnings on Non-Concessional contributions are taxed at 15%.
 
 
Preserved Fund
 
 
If you have not started to receive pension payments from your UK Pension Fund, your fund is considered to be preserved. Other terms used are ‘frozen’, ‘deferred’ or ‘paid up’.
 
 
QROPS
 

In April 2006, Her Majesty’s Revenue & Customs (HMRC) created an efficient method to transfer pensions from UK registered pension funds to Australian pension funds with the introduction of Qualifying Recognised Overseas Pension Scheme’s (QROPS).

QROPS status indicates the fund is registered and approved - by HMRC - to receive pension transfers from the UK without incurring tax penalties. If you transfer to a non QROPS fund, you will be taxed 55% by your UK pension fund.

The QROPS must behave in effect as if it were a UK scheme for those members who have been resident in the UK at any time in the previous five tax years.

Pension-Transfers has access to multiple QROPS in Australia and will work with you to ensure you are transferred to a scheme that is suitable for your needs.

 
 
Transfer Value
 
The value of your Pension Fund as quoted by your UK Pension Fund provider.