Overseas Pension Rule Changes to Impact Tens of Thousands of Retirees
Retirees who have transferred their UK pension into an overseas pension scheme – or are planning on doing so - need to ensure they can still be fully serviced from their adviser as sweeping rule changes come into effect this summer.
The warning from deVere Group comes ahead of the Malta Financial Services Authority (MFSA) implementing its new Pension Rules in Malta which will impact the way in which the Pension Trustees administer both new scheme applications and existing members on a number of levels.
There are estimated to be about 30,000 UK pensions already transferred into Malta-based Qualifying Recognised Overseas Pension Schemes (QROPS).
James Green, deVere’s Divisional Manager of Western Europe, comments: “Malta is a preferred jurisdiction for those wanting to take advantage of the considerable financial benefits of transferring their UK pensions outside of the UK.
“In a move welcomed by deVere, the Malta Financial Services Authority has made significant changes to the Maltese pension regulations. Coming into effect on 1 July 2019, these changes will have a major impact on how advice and service is given to those with Malta-based QROPS.
“Under the tougher new regulations, which further enhance client protections, it is no longer enough for the financial adviser to only be licensed. Now, that licence must allow the adviser to provide investment advice to the member.
“In addition, the adviser must be regulated in the jurisdiction where the client is based.”
He continues: “It is highly likely that many advisory companies will be unable to meet some or all of the stringent new regulations and, therefore, will not be able to service new or existing clients in this area.
“As such, I urge all retirees to check as a matter of urgency that their financial adviser is able to fulfil their obligations in accordance with the sweeping rule changes.”
deVere has worked with each of the Malta Trustees to ensure that it continues to comply with the regulatory changes and the firm recognises these as a positive, proactive development.
The solutions that deVere has in place have been accepted by the Malta Trustees, and the necessary steps have been taken in order for deVere clients to be able to take advantage of appointing an acceptable Investment Adviser with the comfort of knowing that their funds are actively managed in a manner that meets their individual objectives, attitude to risk and regulatory expectations.
Mr Green adds: “As the global leader in overseas pensions and with us fully meeting all the new requirements set out by the Maltese regulator, whereas others may not, it is likely that our QROPS business will significantly increase this year and beyond.
deVere’s Divisional Manager concludes: “For expats or for those who are planning to retire abroad, QROPS – with all their significant associated benefits such as a choice of currency, succession planning advantages, greater investment flexibility and pension consolidation – remain an important solution to help them reach their long term financial goals.
“The Malta regulator’s forward-thinking approach serves to further strengthen their appeal even more.”
(Source: deVere Group)