by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Forward Thinking Magazine : August 2010
Techtalk Written by David Barrett, MAStech 13 In this article we expand on the analysis in Expatriate games part IV – overseas pension entitlements: to transfer or not to transfer? (see Forward Thinking issue 1 of 2008). We examine one means of comparing retirement income models from different jurisdictions, take a brief look at the models in operation in a number of our major trading partners, assess how the Australian system rates on a world scale, and examine the more specific issues facing Australian advisers whose clients hold interests in foreign pension/superannuation schemes. One basis of comparison – the ‘taxing point’ representation A common method of comparing retirement income models of different countries is the ‘taxing point’ representation method. Generally taxation is imposed at one or more of the following points in the retirement savings lifecycle: on contributions, on scheme/fund earnings, and/or on benefit payments. Each taxing point is referred to as either taxed (T) or exempt (E). For example, a retirement income model described as ‘EET’ is characterised by tax exempt contributions, tax exempt scheme/ fund earnings and taxation applying to benefit payments. There are six taxing point models commonly used around the globe, illustrated in Table 1: Table 1: Taxing points Model used in TTE Australia, Greece, New Zealand TET Japan TEE Hungary (I), Luxembourg, Poland, USA (Roths), ETT Denmark, Italy, Sweden EET – most common model used in OECD member countries Austria, Belgium, Bulgaria, Canada, Cyprus, Estonia, Finland, France, Germany, Ireland, Latvia, Lithuania, Netherlands, Norway, Portugal, Romania, Slovenia, Slovakia, South Africa, Spain, Sweden, Switzerland, UK, USA (non Roths) EEE Hungary (E), Hong Kong*, Singapore Notes: (I) – benefits sourced from individual’s contributions Roths / non Roths – USA Roths schemes accept after-tax contributions, other wise USA schemes generally accept pre-tax contributions (E) – benefits sourced from employer contributions * lump sum benefits are tax free, pension benefits are potentially taxable The structures of national retirement income systems around the world are widely divergent, presenting individuals, advisers and central policy makers with much complexity when it comes to cross-border transfers of interests.