Three men in a pub

…none of them were hurt, but a bump on the head made them even more confused about their pension rights.

My colleagues in the Squire Patton Boggs immigration team are being asked by concerned employees: “What will happen to my pension after Brexit?” The answer is likely to depend, for private pension, on what your arrangement currently allows and, for the UK State Pension, where you reside (whether you live in England (i.e. the UK), France (i.e. the EU) or Canada (i.e. elsewhere in the world)).

On 19 March 2018, the UK Government published its draft of a Withdrawal Agreement, and Articles 28 and 29 set out who will be covered by it (for pensions purposes, broadly this will include those who have “engaged” their rights by the end of the transition period, i.e. a UK citizen who has resided in another EU member state; or an EU citizen who has resided in the UK; plus their family members and survivors). Inevitably, this is subject to the caveat that nothing is agreed until everything is agreed; however, the draft indicated that Articles 28 and 29 have been “agreed at negotiators’ level, and will only be subject to technical legal revisions in the coming weeks”. Below is a very brief summary of how individuals might be affected (based on information currently available).

Private pension If you are a member of a UK private pension arrangement (i.e. employer-sponsored or personal pensions) and leave the UK you may no longer be eligible to contribute to the scheme. That is not a change as a result of Brexit; that would be the case under most pension arrangements today. Your arrangement may, however, have secondment provisions, if you will be abroad only temporarily, and you may be allowed to re-join on return to the UK, potentially making up contributions in respect of the interim period.
State pension Currently, you must pay national insurance contributions in the UK for a minimum of 10 years to be eligible for the State Pension. If you paid equivalent state pension contributions in the EEA, Switzerland or certain third countries, they can generally count towards eligibility for the UK State Pension. The UK and EU have provisionally agreed that this will continue for those covered by the Withdrawal Agreement at the end of the Brexit transition period. After that date, unless further agreements are put in place, a third country national who comes to work in Europe and moves between the UK and the EU may need to make two State pension claims.
Private pension To access pension benefits abroad, generally you can leave your entitlement in the UK arrangement until you are ready to retire. Alternatively, you can request that your benefits are transferred out to an arrangement outside the UK, e.g. which is registered in the country where you are living. HMRC maintains a list of approved overseas schemes, known as “QROPS” to which transfers can be made. Again, this will be dependent on what your UK arrangement allows; and any changes to the pensions transfer regime between now and when you wish to take your benefits or request a transfer.
State pension Individuals eligible for the UK State Pension can, currently, receive it whilst resident in most other countries in the world. Those living in the EEA or a country with a social security agreement with the UK, will see their pension increased annually or “uprated”. The UK and EU have provisionally agreed that the current uprating arrangements will continue for those covered by the Withdrawal Agreement at the end of the Brexit transition period. Those resident in other countries (without a specific agreement with the UK which includes significant commonwealth countries such as Canada, Australia, South Africa and New Zealand) receive no increases to their UK State pension, a position which has been subject to significant debate and legal challenge.

In short, for our English, French and Canadian pensioners who are covered by the Withdrawal Agreement, not much will change provided that the arrangements are implemented in their current form; but third country nationals who come to work in Europe, and move between the UK and EU Member States, will be set for more complexity when claiming state pension benefits. The Government has not yet set out any contingency proposals in the event that (for whatever reason) the provisional terms are not incorporated into the final Withdrawal Agreement; or indeed if there is no such agreement at all (i.e. “no deal”). This is a fast-changing topic and individuals will find more details and up to date information by referring to recent House of Commons briefing papers and the information on moving and living abroad on the Pensions Advisory Service website