The Maastricht Treaty (1992) established the EU Single Market which ensures the free movement of goods, capital, people and services throughout the EU.
Free movement of capital is at the heart of the Single Market. It enables integrated, open, competitive and efficient European financial markets and services – which bring many advantages to us all.
For citizens including Irish Residents it means the ability to carry out many operations abroad, such as opening bank accounts, buying shares in non-domestic companies, investing where the best return can be found, purchasing real estate and opening a Pension.
Overseas Transfer Payments Regulations (Ireland)
In 2003, The Minister for Social and Family Affairs (Mary Caughlan T.D.) approved the Regulations providing for the transfer of Pensions to an Overseas Arrangement that provide for Retirement Benefits (The Overseas Pension Scheme and Personal Retirement Savings Account [Overseas Transfer Payments] Regulations, 2003 – S.I. No. 716/2003).
These Regulations provide the ability for Irish Residents to transfer their pension benefits to a pension in other European Jurisdictions without having to be a resident in that jurisdiction.
This is the Revenue’s position on overseas transfers:
Only bona fide transfers are acceptable. The use of certain transfer arrangements relating to PRSAs, to circumvent Revenue rules on the tax treatment of retirement benefits (e.g. transfer payments to the UK and back again to Ireland) are not permissible. A PRSA contributor who directs the PRSA provider to make a payment to, or transfer assets to, an arrangement for the provision of retirement benefits outside the State (i.e. an overseas arrangement) under the provisions of the Occupational Pensions Schemes and Personal Retirement Savings Accounts (Overseas Transfer Payments) Regulations 2003 (S.I. No. 716 of 2003) must, prior to any transfer, sign a declaration to the effect that the transfer conforms to the requirements of the regulations and Revenue pension rules, is for bona fide reasons and is not primarily for the purpose of circumventing pension tax legislation and Revenue rules.
It is the responsibility of all trustees to ensure full compliance with the requirements of the Occupational Pension Schemes and Personal Retirement Savings Accounts (Overseas Transfer Payments) Regulations 2003. These Regulations were made by the Minister for Social and Family Affairs in exercise of powers conferred by the Pensions Act 1990. In essence, prior to making any overseas transfer payments, the trustees must be satisfied that:
(a) the member has requested a transfer
(b) the overseas arrangement provides relevant benefits as defined by Sec.770, TCA 1997
(c) the overseas arrangement has been approved by the appropriate regulatory authority in the country concerned
In order to comply with (b) and (c) above, the trustees should obtain written confirmation from the administrator of the overseas arrangement to which the transfer is to be made.
If the transfer is to another EU Member State, the overseas scheme must be operated or managed by an Institution for Occupational Retirement Provision ( IORPS), within the meaning of the EU Pensions Directive, and must be established in a Member State of the European Communities which has implemented the Directive in its national law. The scheme administrator must be resident in EU Member State.
If the transfer is to a country outside the EU, a transfer may not be made to a country other than the one in which the member is currently employed.
As an Irish company who has pioneered this issue, International Pension Transfer Consultants Limited has a detailed understanding of the complexities around overseas pension transfer for Irish residents.
There are financial benefits for some clients to move their pension funds overseas. It is rightfully your money and we believe that you should have the right to move your funds to whatever jurisdiction you wish – as long as it is in compliance with the Regulations.
It should be noted, however, that this process will not suit everyone, and we reserve the right to review applications on a case by case basis. Contact us today to find out if you are eligible.