Overseas Pension Advice
Learn How To
If you are someone who has worked abroad and have not yet transferred your pension, it may be worth your while to look into this in greater detail. It is however, very important that you do your homework before any decision is made as it may or may not be the best decision for you. In some circumstance the tax implications of transferring it to Ireland may be too significant. Alternatively, in other circumstances, there maybe a way of claiming a tax rebate from this foreign duristriction on the tax paid as a consequence of a double taxation agreement between Ireland and that country.
- Locate your overseas pension
- Get up to date documentation and fund valuation
- Analyse whether or not it makes financial sense to transfer
- The Tax implications of transferring it from the residing country of pension
- Enquiring about any double taxation agreements between Ireland and the foreign durestrictions
- How to transfer the pension to Ireland
- How and when this pension can be accessed/retired
- The possibility of transferring your foreign state pension entitlement credits to increase your Irish State pension entitlement.
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Overseas Pension
THE MAIN BENEFITS OF TRANSFERRING YOUR PENSION BACK TO IRELAND ARE
- The possibility of getting an Enhanced Transfer Value on your pension, particularly if this overseas pension is a defined benefit pension.
- It may also be possible for the you to get access to this pension money from age 50 onwards. In some countries it is later; in the UK the current minimum age is 55.
- It can reduce currency risk once it is transferred into euro. This is especially relevant for people whose pension is held in sterling or another currency, as exchange rate movements can change its value.
- The individual has full control over this money once its transferred. The individual can invest this wherever he/she wants within revenue rules. Its even possible to use this money to buy property or invest in a company etc
- The main benefit of transferring your pension is that upon death, your full pension value is left as inheritance to your loved ones. This is not necessarily the case if the pension is left where it is.
STEP-BY-STEP GUIDE: TRANSFERING FROM A PREVIOUS EMPLOYER INTO A PRSA
If you decide to transfer you overseas pension to Ireland, the transfer value (provided by your previous employer) is transferred to Ireland and into either a Personal Retirement Bond or a PRSA. All Pension providers have these pension vehicles (Zurich/Aviva/Royal London/Irish Life/Standard Life/New Ireland Assurance).
Once the money has been transferred from your ex-employer to Ireland, you have the option of retiring and accessing your Personal Retirement
bond (age 50)/PRSA (age 60). Your funds will be accessed as follows :
- 25% of the pension value can be taken as a retirement lump sum. The first €200,000 (a lifetime limit across all your pensions) is tax-free, €200,001 to €500,000 is taxed at 20%, and anything above that is taxed at your marginal rate.
- The remaining 75% is then transferred into an Approved Retirement Fund (ARF)
- This is another pension vehicle where all withdrawals taxable as income
- A minimum withdrawal of 4% is compulsory each year from age 61, rising to 5% once you are 70 or over for the whole year. If your ARFs and vested PRSAs are worth more than €2 million in total, the minimum is 6%.
- It is at your discretion how much more/if any you withdraw from this pension pot from 61 onwards.
Overseas Pension
State Pension Entitlement in Ireland and abroad
In order to be entitled to a state pension entitlement in either Ireland or a foreign country, you need to have paid taxes to entitle you to a pro rata state pension. In Ireland these are Class A PRSI contributions (Classes E, F, G, H, N and S also count).
Since 1 January 2025, the State Pension (Contributory) is calculated using the Total Contributions Approach (TCA), which is being phased in over 10 years. You need 2,080 contributions (40 years) to get the maximum rate of €299.30 a week (2026), and at least 520 contributions to qualify; anything less than 2,080 is paid pro rata.
State pension entitlements from foreign jurisdictions can be transferred to Ireland to entitle you to a higher state pension entitlement here if you so please. The combination of all the above, when transferred could entitle you to a full state pension entitlement. Alternatively, you can keep these state pensions separate.
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