22nd September 2017 Jane Kola comments in Professional Pensions on post-Brexit pension plans
Expat pensioners may not receive their entitlements if no deal is reached in the Brexit negotiations, the Treasury select committee has warned the Chancellor.
Partner Jane Kola said failing to reach a deal could affect recipients of insurer-backed annuities, as well as future bulk annuity transactions.
“If this is not resolved, then it could affect two separate types of people. First, UK nationals living in the EU who have annuities written by UK insurers that have no other offices in EU countries. Second, EU nationals who have insured UK pension arrangements arising from past UK employments, but no longer live in the UK.” she said.
“Having this legal wrinkle could affect some schemes which are in the buy-in phase (or contemplating it) from moving to buyout.”
Jane said while a scheme is in a buy-in phase, the policy can be paid out of UK-based investments.
“But when the trustees want to move to the buyout phase, if the trustees know that some members may not be able to receive their benefits from individual policies being issued by the insurer once Brexit occurs, it will be very difficult for trustees to move to buyout for at least the affected members if not everyone. Trustees in the buy-in phase or contemplating it should be raising this point with insurers.”
However, Jane added she was confident the issue would be resolved before Brexit takes place, or the market would find a work-around.
Read the full article in Professional Pensions here
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