Australia: Land of golden beaches, clear blue skies and opportunities for anyone who wants to call Down Under their home.
Considering everything that Australia has to offer, it’s no wonder that so many people choose to pack their bags and make the move to this wonderful country every year.
In fact, the Australian Bureau of Statistics estimates that net overseas migration to Australia increased by 8.6 per cent in the year ending 30 June 2013, to hit 244,400 people!
First and foremost, you’ll need to choose a superannuation provider if you intend to start working in Australia. Check out the options available through Virgin Super to see if they suit your needs.
If you’re thinking of moving down to Australia – and staying! – it’s important to think about how you’re going to ensure your retirement savings come with you.
Why should I transfer my pension?
If you’re planning on living in Australia permanently, it’s often much simpler to transfer your savings to an Australian superannuation fund rather than leaving them in your home country.
There are also considerable tax benefits on offer. International pension schemes paid to Australian migrants may incur a significantly higher tax rate than those based in Australia.
Remember that most countries won’t allow you to simply ‘cash out’ your pension fund pre-retirement.
Things get complicated if you’re trying to move your retirement fund from the New Zealand KiwiSaver scheme. It is technically legal if you’re moving it to an APRA-regulated super fund, that is to say, it’s not a self-managed super fund. However, Australian super funds don’t currently accept this transfer.
And besides, you’re much better off keeping your money somewhere secure, where it’ll continue to grow and build towards your retirement.
Are there any downsides to transferring my pension?
Superannuation is a complicated issue, and the rules around transferring a pension from overseas are fairly complex. That’s why it’s important to talk to a qualified professional before making any final decisions.
Obviously, when you transfer your retirement savings from one country to another, there will be costs involved. Not only will there be tax implications, you may also gain or lose money when converting the funds from your home currency into Australian dollars.
That’s not to say that there aren’t many advantages to transferring your retirement savings, but as with all serious life decisions, you should make yourself aware of the various options, guidelines and costs involved.
June 2015 update: Recent changes to UK law means that Australian superannuation funds may no longer be able to accept pension transfers from the UK (otherwise known an QROPs). The Australian Government is currently in discussions with the UK regulators to resolve any issues. Accordingly, Virgin Super has suspended applications for QROPS until further notice.
What if I go back home?
Australia is such a beautiful country that few people who move here ever want to leave, but if you do decide to head back home, for whatever reason, it’s important to understand the options available to you.
If you’re a non-resident, or you’re living in Australia on an eligible temporary resident’s visa, you might be able to take advantage of the Departing Australia Super Payment (DASP).
The DASP basically ensures that any non-Australian who receives superannuation payments while living and working in Australia will be able to take that money back with them when they leave.
Keep in mind that there are a number of conditions around this, so make sure you get in touch with the Australian Taxation Office ahead of your departure to find out how the whole thing is going to work.
Are you planning on moving to Australia any time soon?