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Old 18.01.2009, 11:10
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Swiss & UK pensions - confused & need help

A firend of mine (40 yrs) is very confused about his pension planning. He has been working for a number of different international firms in the UK and now he has been here for a number of years. He has no idea what he should be doing in terms of my pension planning for retirement. As he had gaps in employment, he will probably need to make additional contributions but has no idea how much and for how long. Also if he stays in Switzerland until retirement age, how much can he expect to receive at retirement as a % of his salary? How can he find out what are the best pension plans and what is the best way to plan for retirement?

Also what about the state pensions that he should be getting from the UK and Swiss governements? Are there any advisors in Zurich who can help? Any websiters or links, books? Please help? Thanks.
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Old 20.02.2009, 18:37
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Re: Swiss & UK pensions - confused & need help

These topics are complicated enough without doing it via bush telegraph. If he won't spend the time writing the post himself, he may struggle to find someone willing to spend the time writing the answer. D
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Old 21.02.2009, 13:55
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Re: Swiss & UK pensions - confused & need help

I can help but my rate would be 200 CHF an hour given the effort/knowledge required/involved. Interested? 1st meeting/call/email (1 hr effort) free.

Bear in mind there's a lot to consider including but not limited to:

-Currency fluctuations
-entitlement built up in UK/elsewhere
-UK vs. CH systems
-expected "quality of life" level at retirement
-current pension arrangements in CH

Upon determining the facts of your friend I can then provide a referral to a specialist.
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Old 22.02.2009, 16:12
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Re: Swiss & UK pensions - confused & need help

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Also what about the state pensions that he should be getting from the UK and Swiss governements? Any websiters or links, books? Please help? Thanks.
The UK website at http://www.thepensionservice.gov.uk/ipc/home.asp is a good start. When I wrote them an email asking about my situation, they gave me very useful advice and sent me a detailed statement of my British contributions, even though the last one was nearly 30 years ago.
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Old 22.02.2009, 20:35
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Re: Swiss & UK pensions - confused & need help

I can help a little with the UK part of the question.

Your friends company schemes are likely to be either final salary or defined contribution schemes.

The advice I have had is:

Final salary schemes. If these were accrued whilst working for established companies (think ICI etc) then HOLD onto them. They are not as vulnerable to market forces unless the company itself raided the pension scheme.

Defined contribution schemes. This is where both you and the company invest money in a scheme set up by a third party on the companies behalf. For every 100,000 pounds you put into this pot, this will give you a pension of roughly 6,000 pounds per annum. If your friend has a number of these schemes it may be worth consolidating them by transferring them to the best performing schemes.

Also they will need to look at their state pensions.

Add all these things up and you will get an idea of what the total pensions will be and in my case be shocked at how little it will be. ( In my first job I worked for ICI for 3 years and will have a pension of 2000 pounds per year and then have a defined contribution pot from a further two schemes which will generate a pension or 8 to 10,000 pounds per year.)

The daily telegraph website finance pages are a good place to search for advice

Best

Annie
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Old 21.03.2009, 09:12
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Re: Swiss & UK pensions - confused & need help

Can anyone tell me ...

Suppose you have N years contributions to the british state pension, and you have been living here in CH for many years. Are you still entitled to receive your british pension?

With this in mind, does it make sense to make additional NI payments to the UK pension service to bring your UK contributions up to date? (I would need to continue to do so for 10 years or so to get the full entitlement)

Thanks.
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Old 21.03.2009, 09:14
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Re: Swiss & UK pensions - confused & need help

I found my first answer here...

http://www.thepensionservice.gov.uk/...happens-if.asp

sorry for the noise. Can anyone offer advice on the second contributions question?

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Can anyone tell me ...

Suppose you have N years contributions to the british state pension, and you have been living here in CH for many years. Are you still entitled to receive your british pension?

With this in mind, does it make sense to make additional NI payments to the UK pension service to bring your UK contributions up to date? (I would need to continue to do so for 10 years or so to get the full entitlement)

Thanks.
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Old 27.01.2015, 13:16
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Re: Swiss & UK pensions - confused & need help

It's imperative to review all pension benefits both Swiss and UK state pensions in line with employer benefits. The major issues are currency fluctuations and tax on income in the country of residence at the time of retirement.

Imminent changes in UK pensions rules need to be understood and yes it's worthwhile to maintain the reduced UK state pension contributions whilst living outside the UK.

Anyone leaving Switzerland permanently should also consider the possibility of reducing the potential withholding tax on withdrawal

Genuinely independent advice should be sought at all times.
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Old 27.01.2015, 13:59
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Re: Swiss & UK pensions - confused & need help

As to the UK, the general rule is to try to achieve 30 years of UK NI "stamps" (i.e. contributions) credit. With good strategy you can get years of credit free & gratis or at low cost. Or you can buy Class 3 pension years (up to 6 years after the relevant year http://www.hmrc.gov.uk/manuals/nimmanual/NIM25025.htm )
See, generally:
https://en.wikipedia.org/wiki/Nation...urance#Class_3

(There is a new Class 3A voluntary scheme this year useful for certain persons
https://www.gov.uk/government/upload...tted_FINAL.pdf )

It is often possible to pay Class 2 contributions at a much lower rate; or, through a friendly employer, Class 1 free or at low cost.

The Swiss AVS system generally does not allow even a Swiss citizen to contribute voluntarily while living in an EU/EEA country. (Those who do contribute while abroad, mainly Swiss citizens, are sometimes blindsided by the inclusion of a wealth calculation in the contribution amount.) As for NI, in my experience, HMRC and the Department for Work and Pensions do not have such a residency criterion and often do not enforce nationality rules even when they apply.

Most national state pension schemes are skewed to benefit the low-paid and only some limit benefits to prevent "unjust enrichment". (The USA does so through its "Windfall Elimination Provision" and Canada by having a means- and residence-tested Old Age Security scheme alongside the CPP/QPP.)

For private pensions and supplementary schemes (including tax-sparing saving schemes such as ISAs in the UK) you need to take account of future residence expectations and relevant tax treaties. Thus: the USA has an exemption from its very nasty PFIC rules for pension schemes with certain countries (US-UK Tax Treaty, art. 19) and with many countries exempts pensions from double taxation (taxation by one country on internal gains and earnings, and in the other when benefits are received). But the Internet is full of horror stories of pensions schemes and trusts in one country, and alimony, divorce settlements and wealth taxes in another.

Most of what I have written may not be relevant to the issue you raised. But you never know. State pension systems can be gamed. Government schemes for civil-service and military retirees tend to be protected in any case. But private and voluntary nongovernmental schemes are often targets for "advisors" who do not have your interests at heart and/or do not know the intricacies of cross-border eligibility and taxation.

State schemes are often subject to totalization treaties: these provide that contributions for less than the minimum period (for the USA and the UK, ten years) will be credited to the other country's scheme (unless you contributed to both during a particular year). The treaties also relieve most workers from double liability for contributions (unless waived, which some US employers needed to do to maintain company-wide schemes). A totalization treaty may also protect your Cost of Living Adjustments (the UK denies COLAs to its retirees in countries outside the EU/EEA/Switzerland except for the USA (which otherwise threatened the UK with draconian retaliation, something Canada should have copied, but didn't).

Your friend should educate him/herself as much as possible for free on the Internet and from books before seeing an accredited independent financial advisor. Who may, or may not, understand all the cross-border implications.
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Old 27.01.2015, 14:18
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Re: Swiss & UK pensions - confused & need help

Switzerland: https://www.ch.ch/en/retirement-benefits/

Retirement: http://www.englishforum.ch/search2.php?q=retirement
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Old 28.01.2015, 08:34
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Re: Swiss & UK pensions - confused & need help

Quote:
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As to the UK, the general rule is to try to achieve 30 years of UK NI "stamps" (i.e. contributions) credit. With good strategy you can get years of credit free & gratis or at low cost. Or you can buy Class 3 pension years (up to 6 years after the relevant year http://www.hmrc.gov.uk/manuals/nimmanual/NIM25025.htm )
See, generally:
https://en.wikipedia.org/wiki/Nation...urance#Class_3

(There is a new Class 3A voluntary scheme this year useful for certain persons
https://www.gov.uk/government/upload...tted_FINAL.pdf )

It is often possible to pay Class 2 contributions at a much lower rate; or, through a friendly employer, Class 1 free or at low cost.

The Swiss AVS system generally does not allow even a Swiss citizen to contribute voluntarily while living in an EU/EEA country. (Those who do contribute while abroad, mainly Swiss citizens, are sometimes blindsided by the inclusion of a wealth calculation in the contribution amount.) As for NI, in my experience, HMRC and the Department for Work and Pensions do not have such a residency criterion and often do not enforce nationality rules even when they apply.

Most national state pension schemes are skewed to benefit the low-paid and only some limit benefits to prevent "unjust enrichment". (The USA does so through its "Windfall Elimination Provision" and Canada by having a means- and residence-tested Old Age Security scheme alongside the CPP/QPP.)

For private pensions and supplementary schemes (including tax-sparing saving schemes such as ISAs in the UK) you need to take account of future residence expectations and relevant tax treaties. Thus: the USA has an exemption from its very nasty PFIC rules for pension schemes with certain countries (US-UK Tax Treaty, art. 19) and with many countries exempts pensions from double taxation (taxation by one country on internal gains and earnings, and in the other when benefits are received). But the Internet is full of horror stories of pensions schemes and trusts in one country, and alimony, divorce settlements and wealth taxes in another.

Most of what I have written may not be relevant to the issue you raised. But you never know. State pension systems can be gamed. Government schemes for civil-service and military retirees tend to be protected in any case. But private and voluntary nongovernmental schemes are often targets for "advisors" who do not have your interests at heart and/or do not know the intricacies of cross-border eligibility and taxation.

State schemes are often subject to totalization treaties: these provide that contributions for less than the minimum period (for the USA and the UK, ten years) will be credited to the other country's scheme (unless you contributed to both during a particular year). The treaties also relieve most workers from double liability for contributions (unless waived, which some US employers needed to do to maintain company-wide schemes). A totalization treaty may also protect your Cost of Living Adjustments (the UK denies COLAs to its retirees in countries outside the EU/EEA/Switzerland except for the USA (which otherwise threatened the UK with draconian retaliation, something Canada should have copied, but didn't).

Your friend should educate him/herself as much as possible for free on the Internet and from books before seeing an accredited independent financial advisor. Who may, or may not, understand all the cross-border implications.
The UK will require 35 years constitutions for a full pension in future.
It's possible to pay at the Class 2 rate if working in CH, roughly 150 a year.
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