In terms of pension funds, individuals can no longer rely on defined benefit pension schemes to maintain their standard of living. This article explores the problems facing the expatriate community in relation to retirement and proposes a pension fund offshore as a solution.
It is becoming increasingly evident that a so-called ‘demographic time bomb’ is ticking throughout the developed world. The average life expectancy of the population has steadily increased, putting state social security systems under strain as the ‘baby boomers’ near retirement. In the workplace, many employee defined benefit pension schemes are discovering that they are underfunded in terms of being able to meet their potential liabilities and are being forced to close to new members.
The pension fund dilemma
Wouldn’t it be great if you could keep contributing to the same pension fund as you move from one job in the EU to the next, thus reducing the risk of any setbacks in your plan for retirement?
Saving for retirement as an expatriate can be a challenging exercise. Emloyees can be posted to several different countries throughout the course of their careers. More often than not, each country has different pension fund legislation, coupled with diverse tax regimes that act as barriers to the portability of pension funds.
Labour mobility is an essential element for the successful integration of European member states. Expatriates, with their finely honed skills, are important cogs in the European engine. The unhindered movement of labour contributes towards growth and economic prosperity; it also helps to make the European economy more dynamic and competitive. An EC directive allowing European companies to offer cross-border occupational pensions is currently in place. However, progress seems to be much slower in the area of private pensions.
The offshore pension fund industry
Welcome to the world of offshore pensions, where it is possible to access a wide range of funds whilst enjoying the benefits of tax free growth on investment.
The offshore pension fund industry was developed in the 1970’s when UK-based financial institutions established non-domestic fund management subsidiaries, targeting expatriated investors. Today, offshore investment centres can be found in the European countries of Ireland, Luxembourg and Switzerland. Due to the mobile nature of international employee contracts, expatriates are in prime position to take full advantage of offshore investment opportunities.
The international pension arena offers a wide range of tax-efficient and portable retirement plans. If you would like advice on which pension fund is most suitable for you, please go to Financial health-check
Once you have submitted the form to us, a financial consultant will contact you to discuss your specific retirement needs.