The FMA has been monitoring promotional materials and advertisements that encourage people to transfer their UK pension scheme entitlements, and has requested that certain materials be removed from publication. Some of these materials appear designed to alarm people about changes to the tax treatment of their UK pension scheme entitlements in New Zealand and the accessibility of their entitlements due to proposed changes to UK legislation in April 2015.
FMA compliance director Elaine Campbell said: “We are concerned that people are feeling press-ganged into transferring their pension scheme entitlements from the UK and being put under pressure to act now. For people thinking about transferring their UK pension scheme entitlements, those savings are likely to be one of the most substantial assets accumulated over their working life. Before making a significant decision like this, it’s essential they seek professional financial advice that is personalised for their own circumstances - and also consider talking to a tax specialist."
She said, from a New Zealand tax perspective, the outcome for a person who migrated with a foreign super scheme should be broadly the same irrespective of whether the person transferred their funds to a New Zealand superannuation scheme on day one or left it with their foreign provider. "This reflects the principle that tax should not distort a person's economic decision-making."
Campbell said: "We are concerned that tax issues and a misleading sense of urgency are being exploited by some providers to scare people into transferring their money, without offering a balanced view of the potential pros and cons involved.”
The FMA said people considering transferring their pension scheme entitlements should seek personalised financial advice.
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