Timeline of a Transfer

What is the process?

Below is a basic map of the process one needs to undergo to transfer there UK pension scheme to a QROPS. In many respects the process is not very much different than transferring a pension to another UK scheme. The times are just a guideline based on a typical QROPS application, since many of the delays in that occur arise due to the time it takes for a UK pension provider to pass on information to your financial advisor.

First week

You make an initial enquiry to a financial advisor

Your advisor sends you a valuation request form (sometimes called a letter of authority) to complete – so they can speak to your current pension provider on your behalf.

A Letter of Authority is an authorisation from you which allows your financial adviser to obtain information about your UK pension. This letter is not binding in any way and does not constitute an authority to make changes to or transfer the scheme.

2-4 weeks

You make an initial enquiry to a financial advisor

You email or fax the valuation request form to your financial advisor and send the original (sometimes just a scan or fax will suffice). Your financial advisor will forward this to your pension scheme provider, together with requests for any other specific information about your pension. Most financial advisors do not charge for this.

Your existing pension provider will provide your financial advisor with a statement of your current benefits and a transfer valuation.

Warning: If your pension is a final salary scheme financial advisor should obtain a pension transfer analysis report from a qualified third party pensions technician. This report calculates the minimum amount of growth your transfer value will need to achieve each year to match your final salary benefits. This figure is called the “Critical Yield” and it is actually pretty critical. If a financial advisor attempts to persuade you to transfer your pension without showing you a critical yield calculation this should set alarm bells ringing immediately.

5-8 weeks

Your financial advisor helps you choose a QROPS product and a jurisdiction that best fits in with your current situation or objectives and you complete the application forms.

A discharge form is sent to your existing pension scheme provider, and an application form is sent to the chosen QROPS provider.

Your pension is then transferred into the QROPS and you will instruct your financial advisor to invest the funds as per your agreed mandate. Although the above case is a great example of how quickly a QROPS can take place, this does not reflect every single case and time frames can vary. As mentioned in the first paragraph many of the delays are down to the pension schemes back in the UK.