Emirates Pension Fund
Thread Starter
Emirates Pension Fund
Hi All,
Does anybody know if the EK pension fund is recognized as a QROPS, i.e. would it be possible to transfer an existing UK pension into the EK pot.
Thanks!
Does anybody know if the EK pension fund is recognized as a QROPS, i.e. would it be possible to transfer an existing UK pension into the EK pot.
Thanks!
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Thread Starter
Ok thanks, I thought that.
Is anybody aware if there are any tax implications if that money is taken back to your home country eventually.
And what have you all done with exisiting UK pensions, just leave them there? It seems a shame to have a pot of money do very little....
Is anybody aware if there are any tax implications if that money is taken back to your home country eventually.
And what have you all done with exisiting UK pensions, just leave them there? It seems a shame to have a pot of money do very little....
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This is from the Emirates Group web
Provident Fund/End of Service Gratuity
On leaving the Company an employee is entitled to an End of Service Gratuity or Provident Scheme payment, whichever is higher. The Provident Scheme is a long-term savings arrangement provided to more senior positions and is designed to help plan for retirement. The company contributes 12% of basic salary. You are required to contribute 5% of your basic salary. End of Service (gratuity) payment is calculated as 21 days basic salary per annum for the first 5 years of service and then 30 days basic salary per annum for each year of service beyond 5 years of service.
The Provident Fund has 3 different funds A, B, C
A = the amount that the company contributes-12% of basic salary B = Compulsory amount for employee 5% of monthly basic salary C = voluntary additional contributions made by employee. Eligibility for payout of the Provident fund on leaving Emirates is linked to your length of service. You will receive the market value of your contributions to the Account B fund, but will need to have completed 7 years service to be entitled to the full 100% of the market value of Account A, or 5-7 years to be entitled to 75% of Emirates contributions to Account A. For service periods of less than 5 years you are entitled to End of Service Benefit payments.
I also would be interested to know if a can you transfer from a UK pension to the fund C or would it be better to leave it as a dormant account
Provident Fund/End of Service Gratuity
On leaving the Company an employee is entitled to an End of Service Gratuity or Provident Scheme payment, whichever is higher. The Provident Scheme is a long-term savings arrangement provided to more senior positions and is designed to help plan for retirement. The company contributes 12% of basic salary. You are required to contribute 5% of your basic salary. End of Service (gratuity) payment is calculated as 21 days basic salary per annum for the first 5 years of service and then 30 days basic salary per annum for each year of service beyond 5 years of service.
The Provident Fund has 3 different funds A, B, C
A = the amount that the company contributes-12% of basic salary B = Compulsory amount for employee 5% of monthly basic salary C = voluntary additional contributions made by employee. Eligibility for payout of the Provident fund on leaving Emirates is linked to your length of service. You will receive the market value of your contributions to the Account B fund, but will need to have completed 7 years service to be entitled to the full 100% of the market value of Account A, or 5-7 years to be entitled to 75% of Emirates contributions to Account A. For service periods of less than 5 years you are entitled to End of Service Benefit payments.
I also would be interested to know if a can you transfer from a UK pension to the fund C or would it be better to leave it as a dormant account
Last edited by dv8; 7th Oct 2010 at 17:35.
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No matter how you do the math, the EOSB equals two-fifths of f**k-all when you leave. I always thought it would be enough to buy a nice car on retirement. Turn out after 11 years I had enough to buy a little boat..... 
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I disagree,
Some of our colleagues have made a tidy sum with the provident fund. True its not a pension fund but more like a self managed portfolio. Nothing is guaranteed and its conceivable that the day you decide to leave the fund may be worth very little. It depends entirely on how you manage your portfolio and what you've invested in. I myself am not an astute financier but have managed to make a respectable return over the last years. I see it as more of a great savings tool than a "pension"
Some of our colleagues have made a tidy sum with the provident fund. True its not a pension fund but more like a self managed portfolio. Nothing is guaranteed and its conceivable that the day you decide to leave the fund may be worth very little. It depends entirely on how you manage your portfolio and what you've invested in. I myself am not an astute financier but have managed to make a respectable return over the last years. I see it as more of a great savings tool than a "pension"
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There is a lot of incorrect information here and ByeByeDubai is providing most of it.
As others have said, it's a form of saving for which 12% is provided from the Company, rising to 15% after 10 years. If you decide to use the C fund, which I do, you gain access to a far wider range of funds, almost all of which are available to the public (unlike the A & B ). Most of these are equity based and the great advantage we have is no annual charge. This saves you anything from 1-3% per year. That can be a significant amount over 15 years. Furthemore, all pilots have 2 free consultations per year regarding their investments and their future goals. Don't blame the Company if your fund falls, that's down to each individual to manage. Fund selection will depend on personal circumstances and your appetite for risk.
Personaly, I too look at it as a savings fund. 7 years in EK and in some recent months the fund has made close to $20,000 profit (each month). Before the recovery, however, my fund almost halved in value. It can be a rollercoaster of a ride but again, it depends on what your invested in. Cash in my opinion is a complete waste of time. As for some of ByeBye's last points.
1) The Company changed the date for which salary was credited to the fund several years ago. Monies are now allocated to the provident scheme around 10 days earlier than before.
2) You will always have access to the B and C fund so it makes no difference when you leave, only the Companies contributions are linked to service and these are pro rated. You would still be entitled to the EOSB if, say, you left after only 2 years.
.
3) Ensure against whos debt? What some people have lost in the Dubai property crash, a million $US would not be sufficient.
4) The funds are set up in an offshore trust, based on the Isle of Man. This is for the very reason to protect each individual asset. the Company has no legal right or even general access to the B or C fund. Nor to the A fund after 7 years. In the highly unlikely event of the Airline going belly up, your fund is ring fenced.
The only people that can be blamed for no meaningful management is the individual themselves. There is a lot of apathy amongst pilots when it comes to the Provident scheme. It's as I say to the missus every night;
" It's in your hands now, do with it as you wish!"
As others have said, it's a form of saving for which 12% is provided from the Company, rising to 15% after 10 years. If you decide to use the C fund, which I do, you gain access to a far wider range of funds, almost all of which are available to the public (unlike the A & B ). Most of these are equity based and the great advantage we have is no annual charge. This saves you anything from 1-3% per year. That can be a significant amount over 15 years. Furthemore, all pilots have 2 free consultations per year regarding their investments and their future goals. Don't blame the Company if your fund falls, that's down to each individual to manage. Fund selection will depend on personal circumstances and your appetite for risk.
Personaly, I too look at it as a savings fund. 7 years in EK and in some recent months the fund has made close to $20,000 profit (each month). Before the recovery, however, my fund almost halved in value. It can be a rollercoaster of a ride but again, it depends on what your invested in. Cash in my opinion is a complete waste of time. As for some of ByeBye's last points.
1) The Company changed the date for which salary was credited to the fund several years ago. Monies are now allocated to the provident scheme around 10 days earlier than before.
2) You will always have access to the B and C fund so it makes no difference when you leave, only the Companies contributions are linked to service and these are pro rated. You would still be entitled to the EOSB if, say, you left after only 2 years.
.
3) Ensure against whos debt? What some people have lost in the Dubai property crash, a million $US would not be sufficient.
4) The funds are set up in an offshore trust, based on the Isle of Man. This is for the very reason to protect each individual asset. the Company has no legal right or even general access to the B or C fund. Nor to the A fund after 7 years. In the highly unlikely event of the Airline going belly up, your fund is ring fenced.
The only people that can be blamed for no meaningful management is the individual themselves. There is a lot of apathy amongst pilots when it comes to the Provident scheme. It's as I say to the missus every night;
" It's in your hands now, do with it as you wish!"
Last edited by BYMONEK; 9th Oct 2010 at 16:56.
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If your UK pension is simply money in the bank then you can add it to the C Fund although I'm not sure that putting all your eggs in one basket is wise.
For anyone interested in QROPS the size of the fund needs to be over £150,000 really to make it viable as the 'fees' are quite high. But it is proving an extremely popular method of transferring wealth away from the UK - about £500 Million has been transferred out in the last 2 years. With funds of that scale being withdrawn I wonder how long the government is going to allow it to continue.
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A lot more aquainted then you it would appear.
I just hope that your knowledge and application of SOP's is better than your knowledge of the Provident fund if you ever decide to go into training. Nothing worse than those who can't admit when they know little about something and try to bull**** their way out.
You'll need to improve your spelling too for the reports. It's 'naive' to assume otherwise!
I just hope that your knowledge and application of SOP's is better than your knowledge of the Provident fund if you ever decide to go into training. Nothing worse than those who can't admit when they know little about something and try to bull**** their way out.
You'll need to improve your spelling too for the reports. It's 'naive' to assume otherwise!
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I would be interested to see an internal audit. I would guess the fee structure is much more than advertised. Hidden costs for managed funds such as these can be very high. Lets stick to the A & B funds here, the C fund is your own contribution and not worth the debate.
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atiuta
still wrong
... not only was I here but I was at the meeting where the scheme was introduced (in a mouldering conference room at Cargo Village). Even then it was clear that for all the hooray-Henry magnificence of the idea, it was merely an accounting dodge to get the EOSB off the books.
... not only was I here but I was at the meeting where the scheme was introduced (in a mouldering conference room at Cargo Village). Even then it was clear that for all the hooray-Henry magnificence of the idea, it was merely an accounting dodge to get the EOSB off the books.
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I stand corrected, or should I say let me clarify my statement.
There was the EOSB and another scheme that the current provident fund replaced. The trouble was, the new provident fund became greater of, rather than both.
There was the EOSB and another scheme that the current provident fund replaced. The trouble was, the new provident fund became greater of, rather than both.
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Saltaire
The problem with the A & B fund is exactly as you imply. There may well be hidden charges and the fund managers of these 'unique' investments may work to guidelines specified by EK. In other words, reach the 'benchmark' of say for example 10% and, when its reached, go into cash. Meanwhile, the equity market continues to rise and you lose out on further profit potential. Company is happy because it beats EOSB without further risk.
The beauty of the C fund is the investments are available to Joe public and their unit price is always transparent. It can, therefore, be monitored daily. Whilst there are no hidden charges for the C fund, the only negative is the lack of transparency on the sell date. ie, they could say the units were sold on Thursday for $6 when they actually sold them the day before for $6.10. They pocket the 10 cents per unit. Of course, I'm not saying they would, just that the opportunity exists...........
ByeByeDubai
Grow up! You sound like my 8 year old daughter........before she was eight!
The problem with the A & B fund is exactly as you imply. There may well be hidden charges and the fund managers of these 'unique' investments may work to guidelines specified by EK. In other words, reach the 'benchmark' of say for example 10% and, when its reached, go into cash. Meanwhile, the equity market continues to rise and you lose out on further profit potential. Company is happy because it beats EOSB without further risk.
The beauty of the C fund is the investments are available to Joe public and their unit price is always transparent. It can, therefore, be monitored daily. Whilst there are no hidden charges for the C fund, the only negative is the lack of transparency on the sell date. ie, they could say the units were sold on Thursday for $6 when they actually sold them the day before for $6.10. They pocket the 10 cents per unit. Of course, I'm not saying they would, just that the opportunity exists...........
ByeByeDubai
Grow up! You sound like my 8 year old daughter........before she was eight!
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It doesn't really matter which agent you go through (Deveres etc) they all sell the same investments (ie. Those approved by the HMRC) - before you sign up it is wise for you to do your own research on their suggested companies. PIC (a subsidiary of Deveres) suggested I invested in a fund with SKANDIA that has won several awards within the industry and had a decent track record. So if you do your own research and don't blindly follow the heard in dismissing certain companies out of hand then you shouldn't go far wrong.
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Before you transfer your deferred company pension funds you should speak to an IFA. Depending on the UK pension scheme it may not be advantageous to transfer as you could loose out on bonuses for eg that a company may put when you retire and other benefits attached to a pension scheme. Transfering is not all about tax.
In my case my IFA recommended I did not transfer although my aim was to consolidate several schemes as some were very small. It depends on the individual various pension scheme and each scheme must be looked at on its own merit.
HTH
In my case my IFA recommended I did not transfer although my aim was to consolidate several schemes as some were very small. It depends on the individual various pension scheme and each scheme must be looked at on its own merit.
HTH
