The United Kingdom (UK) Government's Her Majesty's Revenue & Customs (HMRC) department has recently written to all Qualifying Recognised Overseas Pension Scheme (QROPS) providers in Australia instructing them to ensure their schemes remain compliant with new rules that prohibit members from accessing their benefits before age 55, unless they are retiring due to ill health.
Australian QROPS funds are unable to meet this new requirement.
Unless this is resolved quickly:
- this may have implications for disclosures in product disclosure statements (this may not be the case if the disclosures are high level, as occurs in many product disclosure statements we review);
- this will have implications for other disclosure documents produced for members (or prospective members) interested in transferring a UK pension to an Australian super fund, including documents or information made available from a website. Often, product disclosure statements cross-refer to another document or the website for more details about this. This might be material issued by the trustee, an administrator or promoter;
- apart from disclosure implications, there may be broader implications for a trustee including the potential for claims by individuals who suffer some detriment (eg. incur extra tax) because the Australian fund to which a transfer is made does not confirm with UK requirements. Because of current uncertainties, we understand some trustees have suspended the acceptance of transfers from UK pension schemes.