- January 3, 2023
- Posted by: Simon Huften
- Categories: Investing, QROPS, QROPS RRIF, QROPS RRSP
– Industrial Alliance (iA Financial) is an eligible investment provider for QROPS in Canada
– UK pensions that are transferred to Canada can be invested with Industrial Alliance
– Industrial Alliance offers segregated funds investment options
– Segregated funds have enhanced estate protection and principal guarantees
– Segregated funds offer investment options for stocks, bonds and money market
Industrial Alliance – Qualified UK Pension Provider in Canada
Industrial Alliance is one of the few investment companies in Canada that qualifies for QROPS (qualified recognised overseas pension scheme). A QROPS is a pension scheme that meets certain requirements established by Her Majesty’s Revenue and Customs (HMRC) to be transferred from the United Kingdom (UK) to a pension plan in another country. In this case, the pensions would be leaving the UK and coming to Canada to be deposited into a QROPS RRSP account.
Typically, QROPS transfers are free of UK taxes when the money leaves the UK to come to Canada. The transfer process can be rigorous and can take up to a few months to complete, since various information must be provided between Industrial Alliance and the pension administrator in the UK. We do everything in our power to ensure that we minimize delays as much as possible to ensure a timely transfer.
Investment Options – Segregated Funds
If you decide to transfer your UK pension to Canada, you are limited with the amount of investment companies that your pension money can be invested with. iA Financial Group is currently the only qualified investment provider in Canada who you can invest your QROPS once it arrives in Canada. The reasoning behind this is because of the amount of additional work the investment provider has to complete behind the scenes for QROPS accounts in Canada that most investment companies do not want to deal with (including dealing with HMRC).
With that being said, iA Financial Group is quite a large investment company in Canada and has two different arms of their company which you can invest with. You can choose to invest the money from your UK pension in segregated funds with Industrial Alliance or mutual funds with iA Clarington.
Industrial Alliance has a wide offering of segregated funds that you can choose from to invest your UK pension into. Segregated funds are very similiar to mutual funds, but offer different guarantees which protect the sums invested against market declines which mutual funds do not. Industrial Alliance has segregated funds which invest in a variety of different stocks, bonds or money market securities and are managed by experts.
Here are some of the main advantages of investing your UK pension in segregated funds once the funds arrive in Canada…
- Protection of the amount invested upon maturity of the investment and upon death
- Protection of investment gains each year with resets
- Possibility of avoiding probate fees
- Quick settlement in the event of death
- Possible creditor protection
- Simpler and faster tax declaration
You can learn more about the individual segregated fund options available from Industrial Alliance by clicking here.
If you have decided to transfer your UK pension to Canada, you have the option of investing your pension funds in either segregated funds with Industrial Alliance or mutual funds with iA Clarington.
Choosing between segregated funds and mutual funds for your QROPS will depend on your individual financial goals and comfort level of investing. Segregated funds cost more than mutual funds (higher management fees), but provide guarantees which many expats enjoy for their pension funds as it provides peace of mind.
Once it has been confirmed that your UK pension is eligible for a transfer to Canada, we should have a detailed conversation so that you have a clear understanding of what options are available to you and which one will provide the highest amount of value for you.
Please contact us today for a free consultation to discuss further.