Question:
I have lived and worked in Spain for almost 17 years. I have accumulated pension rights here, calculated according to the years I worked and my salary, which is quite good for Spain. I am not of retiring age yet, but wish to return home and wonder about my pension rights in Ireland and how I might transfer it, or how I can make sure I will have an income when I do retire.
Answer: Elma Fox, trustee manager, Independent Trustee Limited (independent-trustee.com)
Your pension rights in Ireland will depend on what, if any, Social Welfare pension you are entitled to and if you accumulate or have accumulated any private pension benefits here before you retire. As I don’t have any information on this, I have focused my answer on the pension rights you have accumulated in Spain.
There are two main aspects to think about when considering transferring pension rights from one country to another.
Firstly you will need to assess if it is in your best interests to transfer your benefits from Spain to Ireland. For this you will need to gather the following information:
- What pension benefits/rights you have accumulated in Spain?
A current value, transfer value and/or pension at retirement entitlement.
- Are the pension benefits/rights transferable?
This will depend on the rules and regulations applying to overseas transfers in Spain.
- If the transfer is allowed what are the implications?
Will you receive a reduced value or lose some advantageous pension rights in Spain?
The first step here is to contact your employer or pension provider in Spain to ask for a statement of your benefits and options. Once you have this you may want to get some advice on the possibility and implications of transferring. The advice should compare:
1. How the benefits are paid?
2. When the benefits are paid?
3. Projected values and costs
4. Taxation
5. Investment choices
The second thing to figure out is if an Irish pension arrangement can or will accept a transfer in from Spain. In general it should be possible to transfer benefits from a pension arrangement in Spain to an Irish pension arrangement. Unfortunately the devil is in the detail and there are a number of requirements that Irish pension arrangements need to consider when deciding if they can permit a transfer:
1. Does the Spanish/overseas arrangement permit the transfer?
This can be confirmed by the pension provider in Spain. The Spanish/overseas arrangement will most likely require information on the Irish pension arrangement before confirming that they will allow the transfer.
2. Does the Spanish/overseas arrangement provide pension benefits in a similar pension regime as Ireland - ie does it provide any kind of pension, lump sum, gratuity or other like benefit on or after retirement or death or in anticipation of retirement for you or a dependant
This should be confirmed by the pension provider in Spain.
3. Is the Spanish/overseas arrangement approved and/or regulated by the appropriate authority in the jurisdiction it is coming from and does it comply with the appropriate regulations?
This can be provided by the pension provider in Spain, together with their registration/approval number and confirmation of their compliance with the relevant regulations.
4. As the transfer is from another EU Member State, the pension arrangement must be operated or managed by an Institution for Occupational Retirement Provision (IORP), within the meaning of the EU Pensions Directive, and must be established in an EU Member State which has implemented the Directive in its national law. The scheme administrator must be resident in an EU Member State.
This can be confirmed by the pension provider in Spain.
As you can see transferring pension entitlements is not straightforward. However this should not deter you from considering it as pension entitlements can be a very valuable asset and are worth taking the time to think about and take advice on, especially when moving country. The Department of Social Protection have a useful leaflet https://www.welfare.ie/en/Pages/Transfer-of-Private-Pensions-to-Ireland-for-returning-Irish-Emigrants.aspx .
As a first step request information about your pension entitlements from your employer or pension provider in Spain and make sure they have your up to date contact information so they can stay in touch with you.
