RPSM13101070 - Technical Pages: International: Migrant member relief: Definition of an overseas pension scheme

Definition of an overseas pension scheme

[s150(7) and The Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006 - SI 2006/206] 

In order for a scheme to be an overseas pension scheme it must meet the following three conditions

• It must be a pension scheme as defined in section 150(1).
• It cannot be a registered pension scheme.
• It must be established outside the UK.

A scheme can be a pension scheme if it provides benefits to or in respect of persons in the circumstances referred to in section 150(1) (see RPSM02300020) even if it also provides benefits in other circumstances. It is possible in principle for foreign mandatory and social security arrangements to be pension schemes.

Normally, a scheme will be treated as established in the country where its registered office and main administration is, or, if there is no registered office, where its main administration is. The scheme’s location of main administration is where the scheme’s decisions are made. In the case of a trust-based scheme, that would normally be determined by reference to where the scheme trustees are resident.

It must also meet the following conditions

• It must be regulated as a pension scheme in the country or territory in which it is established or, if there is no body by which it could be so regulated, then certain conditions must be met (see RPSM13101075). It can be an occupational pension scheme (including a public sector scheme), a personal pension scheme or a social security scheme. A scheme is regulated in a country or territory if it is subject there to supervision by the national authorities that are responsible for ensuring that pension schemes are administered soundly in order to protect members’ interests.
• It must be ‘recognised for tax purposes’ by the country or territory in which it is established. This means that it must meet primary conditions 1 and 2 as well as condition A or B which are set out in RPSM13101080.

Exceptionally, if it is a scheme established by an international organisation it must meet the conditions set out in RPSM13101085 instead of meeting the previous two conditions.