Understanding pensions and their terminology requires large doses of Alphabet soup.

A QROPS on the HMRC list that’s also an RRSP recognized by the CRA. (Who writes this stuff?)

A Qualifying Recognised Overseas Pension Scheme (QROPS), is an overseas pension scheme that meets mandatory requirements set by Her Majesty’s Revenue and Customs (HMRC). A QROPS can receive transfers of UK Pensions. In Canada, QROPS are often also approved as a Registered Retirement Savings Plan (RRSP) by Canada Revenue Agency (CRA).

DB vs. DC?

A Defined Benefit (DB) plan, is a retirement account for which both an employer and employee make contributions that promise the employee a set payout at retirement e.g. two thirds of final salary. You do not have your own retirement pot but instead have a defined income. A Defined Contribution (DC) plan is a retirement account where both an employer and employee make contributions to an employee’s own individual retirement pot – the employee has flexibility to take the income any way they wish but the amounts depend on how much was contributed and how those contributions were invested.

Did You Know?

Not every UK pension is eligible for transfer.

There are two major exceptions: The first is the old age or state pension and the second is any unfunded pension plan (often provided by the Public Sector e.g. National Health Service, Teachers, Civil Service, Police, Military).

Did You Know?

Some pension amounts are defined as “Trivial” and you can cash them in.

Right now, but subject to change, if the total lump sum value of your UK Defined Benefit and Defined Contribution pension plans is £30,000 or less you can withdraw the Defined Benefits amounts in cash and bring it to Canada.

Did You Know?

Your RRSP contribution limits are not affected even if you deposit a large amount from a recognized UK pension plan to a Canadian QROPS.

Your RRSP contribution limits are not affected even if you deposit a large amount from a recognized UK pension plan to a Canadian QROPS. You declare the amount transferred as income on your Canadian tax return and then take a…

Understanding pensions and their terminology requires large doses of Alphabet soup.

A QROPS on the HMRC list that’s also an RRSP recognized by the CRA. (Who writes this stuff?)

DB vs. DC?

Related Posts

Not every UK pension is eligible for transfer.

Some pension amounts are defined as “Trivial” and you can cash them in.

Your RRSP contribution limits are not affected even if you deposit a large amount from a recognized UK pension plan to a Canadian QROPS.

Since 2001, we have helped hundreds of people who worked in the UK to have better retirement prospects by transferring their frozen company pensions, tax free, to Registered Retirement Savings Plans in Canada.

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