Qualifying recognised overseas pension scheme (QROPS)

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What is a QROPS?

A QROPS is a Qualifying Recognised Overseas Pension Scheme. The purpose of this scheme is to facilitate transfers between pension plans in the United Kingdom (UK) to pension plans in other countries that meet the requirements established by His Majesty’s Revenue and Customs (HMRC).

Who would be a good candidate for a transfer to a QROPS in Canada?

QROPS are designed for UK residents who meet all the following criteria:

  • Aged 55 or older
  • Currently residing in Canada with expatriate status or are looking to relocate shortly
  • Plan on residing in Canada for a minimum of five (5) years
  • Plan on retiring in Canada
  • Wish to have their pension savings in the same country, in Canadian dollars

Main benefits of QROPS at iA

  • Allows you to benefit from market growth potential and enjoy all the advantages of segregated funds
  • Backed by a company with over a century of outstanding financial strength
  • Offers a wide range of funds managed by highly skilled professionals
  • Offers creditor protection1
  • Ensures a quick, confidential transfer to heirs at your death (no probate fees)1

How do I transfer a pension plan from the UK to Canada?

A financial advisor can give you the best advice on how to invest your assets in Canada. You can meet with them virtually or in person.

You can contact your financial security advisor to start the transfer process. Should you not already have a financial security advisor, you may reach a customer relations specialist. 1Possible with a beneficiary designation. 2For more information on pension schemes and their transferability, contact a UK tax specialist or financial advisor (fees may apply).

Frequently Asked Questions

With the QROPS, you can repatriate your pension scheme from the United Kingdom (UK) to Canada and enjoy your retirement outside your country of origin. Some of the benefits of the QROPS include:

  • More control of your choice of investments
  • Avoiding exposure to foreign currency risk

Eligible schemes include, but are not limited to:

  • Defined-contribution (DC) pension schemes
  • Private-Sector defined benefit (DB) schemes
  • Funded public-sector defined benefit (DB) schemes

You must be 55 years of age or older to open an RRSP-QROPS contract. This is a contractual provision that was included in the QROPS rider in order to comply with HMRC regulatory requirements. The HMRC wishes to ensure that the contractholder cannot begin receiving their retirement income before the age of 55.

Additionally, you must be under the age of 75 to make a transfer from your UK pension scheme to a QROPS.

Since April 6, 2017, you must have resided outside the UK for ten consecutive fiscal years before you may begin to make withdrawals from your QROPS; if not, certain tax implications from the UK may apply. Before that date, five fiscal years was sufficient.

In addition, even if you comply with the ten years requirement, tax implications from the UK may apply if you make a transfer from your QROPS in the five years following your initial transfer (5 years from transfer rule).

Transfers from a QROPS to another plan that is neither a registered pension scheme in the UK nor a QROPS may be subject to tax on non-authorized payments, because if the payment was made from a registered pension scheme in the UK, the transfer will be a non-authorized payment (since it is not an eligible transfer).

A withdrawal made by a QROPS contractholder of the minimum normal retirement age (55 years) may also be taxed if it is a non-authorized payment. To determine if a payment is authorized, all provisions applicable to UK registered pension schemes must be taken into account.

If you move outside of Canada before the end of the full five UK fiscal years (from April 6 to April 5 of the following year) that follow the transfer and if you do not transfer your balance to a QROPS opened in your new country of residence, iA will deduct 25% in tax from your plan and transfer it to HMRC.

Also, you may be subject to tax from the UK if you make a withdrawal or transfer during the ten-year period during which you cease to be a UK resident.

Since these sums are deposited in an RRSP, the standard Canadian RRSP taxation rules apply. The transfer may, under certain circumstances, be subject to tax from the UK, for example if the amount of the transfer exceeds the “Overseas Transfer Allowance.”

1PTM113210 - International: UK tax charges on non-UK schemes: the member payment charges and taxable property charges: the member payment charges: basic principles – “When the member payment charges do not apply.”

2PTM113210 - International: UK tax charges on non-UK schemes: the member payment charges and taxable property charges: the member payment charges: basic principles – “When the member payment charges do not apply.”