Irish Pension Transfers

Transferring existing Irish benefits outside of Ireland is a relatively new practice for Irish expats, or those who have worked in Ireland at some stage.

The available transfer options are not always widely understood until retirement, at which point a transfer overseas may no longer be authorised. Hence, taking expert and timely advice is essential.

The Irish pension framework is well structured for Irish tax residents. -However, anyone who becomes non-tax resident can face a host of complexities and disparities. These issues are often only discovered at retirement, or later,- when funds may pass to beneficiaries.

For example, currently non-Irish tax residents with preserved defined contribution (money purchase) pension funds are faced at retirement with only one option:

The purchase of a

There are several issues with such annuities;

  • They currently offer historically low returns
  • The fund value cannot be passed onto your beneficiaries effectively ‘dying with you’
  • Patterns of expenditure can often change during retirement so annuities do not offer the flexibility needed

If the pension is left in Ireland it is usually impossible to access the fund value flexibly, unless the scheme member returns to Ireland. As approximately one thousand multinational companies call Ireland home, many individuals accrue Irish pension benefits only to subsequently relocate elsewhere. In this case, the possible overseas transfer options should always be reviewed since greater flexibility and accessibility options could be available.

Irish Pension Transfers

Irish Revenue requirements for an overseas pension transfer

It is essential to note that the Irish Revenue requires that any transfer overseas must be for bona fide reasons and should not be used simply to circumvent Irish pension tax rules and/or Irish Revenue pension rules.  

Such reasons could include any of the following: 

  1. Consolidation of existing pension benefits into one scheme or jurisdiction. 
  2. The ability to invest and draw benefits in local currency, removing FX uncertainties during retirement. 
  3. The ability to appoint a locally regulated advisor.  

Which Irish schemes can be transferred overseas and where?

Former employees, either already living or intending to live outside of Ireland, with pension benefits in Irish occupational pension schemes (whether defined benefit or defined contribution) can transfer to a pension arrangement in any EU jurisdiction, irrespective of where they are tax resident. The only proviso is that the member has not commenced the drawdown of benefits.

In fact, under Irish law the member has a “statutory right” to do so. However, if the member wishes to transfer company benefits outside of the EU, to the UK for example, the individual must currently be employed or resident in that jurisdiction.

One common misunderstanding is that the receiving pension scheme must be an occupational pension scheme or an IORPS, which is not the case. Also, for avoidance of doubt, the overseas transfer charge is not relevant for Irish transfers.

Another common Irish pension vehicle that can be transferred to a UK registered scheme, including a SIPP, is a personal retirement bond. Again, this is irrespective of the residency of the individual.

Currently, transferring any other Irish pension arrangement may be complicated, and is generally not permitted or results in a significant tax charge. In addition, unfunded Irish public sector schemes cannot be transferred.

Our Irish Pension Transfer Service 

This service is designed specifically for Irish expatriates or other individuals with Irish pension schemes, intending to retire overseas.

At Blackden, we have access to financially strong and secure options when considering EU jurisdictions which are well placed for transferring Irish occupational scheme benefits overseas. This can enable the individual to:

  • Appoint a regulated investment adviser licensed in the individual’s jurisdiction
  • Access a wider regulated investment choice with the ability to invest and draw benefits in their preferred currency avoiding future Euro FX risks.
  • Consolidate existing pension benefits held in Ireland UK or other jurisdictions.
  • Draw benefits generally from age 50 – 75.
  • Take an initial lump sum of up to 30% of the retirement fund exempt from tax in the new holding EU jurisdiction.
  • Choose if they wish to draw retirement benefits directly from the EU-based scheme or buy a pension annuity providing more flexibility on retirement.
  • Benefit from double taxation treaties with the relevant EU jurisdiction which removes the complexities of double taxation on their retirement benefits.
  • Effectively structure their succession planning.
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