India based QROPS Verses(V/S) OFF Shore based QROPS- Which is the best option for India based UK expats/NRI's

Many India based UK expats/NRI's who have been working as Doctors, Engineers,Teachers etc., in United Kingdom would have accumulated UK pensions. many of them do consider transferring their accumulated UK pensions to a QROPS overseas for availing many more benefits like more grwoth, tax benefits etc.,

Many of them might be wondering whether to choose India based QROPS scheme Or OFF Shore QROPS solutions.I have tried to give both merits & demerits of both Indian & OFF Shore QROPS over each other in the following two Scenerio's. So that respective client's who have accumulated UK pensions will be helped. Hope below information would be helpful for India based UK expats/NRI's who have accumulated UK pensions:

Scenario-1

Scenerio-1			Advantages of India based QROPS Over OFF Shore  QROPS
Sl No		India Based QROPS				OFF Shore QROPS
1		Emerging markets like India tend to offer better returns than those offered by developed economies & other emerging markets in the long term since the fundamentals are strong in India				Developed Economies will not produce better returns & Identifying potential emerging markets & particularly potential stocks, mutual funds & other investment options is the most challenging one for Investment Managers & financial advisers since the investment market is geographically huge.
2		The term ‘Guaranteed’ can be found only in India based QROPS. The investment portfolio is not linked to stock market & there will be no investment fluctuations & the entire fund both base transferred NHS pensions & Bonus added are safe & Guaranteed				There is no term ‘Guaranteed’ associated with the OFF Shore investments. The entire investment portfolio is linked with the capital market. The investment portfolio fluctuates as the capital market fluctuates. The investment value can go up drastically as well as down anytime. The investment risk is borne by the policy holder.
3		Regulatory protection- All the insurance companies operating in India are subjected to solvency regulations of IRDA. The minimum solvency ratio is 1.5 times of the insurers liability towards the customer. So there will be a kind of Soverign Guarantee against such risks like ‘Insolvency of Companies’. IRDA is one of the regulators like RBI who regulates banks. Both IRDA & RBI are nothing but Govt of India. So it’s a kind of Sovereign Guarantee. This kind of protection can be found only in India &no where else across Globe.				There is no such concept of ‘Solvency Margin’ protection available with OFF Shore QROPS schemes. The investments  risks is completely borne by the policy holder. In case of economic recession, there is a chance to loose the entire fund following the underperformance of the Investment portfolio.
4		On attaining age 55, the member can take upto  1/3rd of the total lumpsum & on remaining 2/3rd the member will be paid pension income till death. On member’s demise, the entire 2/3rd will be given to beneficiary as tax free lumpsum. It almost works like keeping money in a bank’s safe fixed deposit & taking interest on it in the form of pensions. The entire 2/3rd capital is safe, Guaranteed & tax free.				On attaining vesting age the Member will start getting pension income. The pension rate is fixed based on  Member’s age & UK GAD table. Based on Member’s age & UK GAD table a percentage is fixed stating how much a member can start taking out every year from the accumulated pension Corpus. It’s called drawdown pensions. As member starts drawing pensions out of the corpus, the size of the corpus keeps reducing every year & at the same time the remaining corpus gets invested. Once again investments can go up as well as down. So on member’s demise it is difficult to say, what corpus is left for family. It may be higher than India based QROPS or lesser than that also. Or sometimes with no funds also to pass to family.
5		Easy & comfortable access to policy details like, you can walk into nearest branch office, meet financial consultant in person, since the office branches located in your base resident country.				Comparatively not so comfortable to access your policy details since the concerned offices located in different parts of the world. Also OFF Shore QROPS structure is totally different from India based QROPS. With OFF Shore we need to choose a Trustee (like Sovereign), Custodian insurance company (like Skandia) & QROPS jurisdiction as well as Investment fund houses. So that to get policy details, we need to contact all of the above separately. Where as in India, you need to call just ‘One Point of Service’, for example like ING, LIC etc. There is no such confusions.
6		Majority investments are done in Bond instruments like Govt Securities & AAA rated funds. In India Bonds interest rates are comparatively higher than any other emerging economies. Even Savings banks interest rates in India is more than 3.5% p.a. So that your investments value can only go up & less prone to down turn movement.				Eventhough you got the option of investing in Bonds & Debt instruments there Is no term ‘Guaranteed ‘component associated with the instruments. OFF Shore Bonds will give their stated returns subject to solvency of the issuer bank/company for the stated Bond/Debt maturity term. That means investments in Structured products also carries the same level of risks as if you have chosen to invest in equity based investment products. Moreover, returns with OFF Shore bonds are not beyond 6%.

Added to all the above points, now the very positive development with the Indian political history is, India got the most stable central Govt in the last parliament election-2014 with absolute majority. Since last 30 years, India Govt’s have been running with Coalition due to which the former Govt’s often face many hurdles to bring pro-growth legislations as for as economic issues are concerned. The coalition Govt’s has been forced to protect certain vested interests of different regional political parties. Now the present stable Govt can bring Pro-Growth legislations that will boost the economy. Stock  Market boom is just the reflection of the same. Since fundamentals are strong in India, we expect growth of the economy in the long term.

Scenario-2

Scenerio-2			Advantages of OFF Shore QROPS Over India based QROPS
Sl No		India Based QROPS				OFF Shore QROPS
1		Basically designed for Indian residents & don't suit OCI's as they are Global people				Designed for a more transient population & International advisers are more familiar with them.
2		Investments are held in INR & Investment value is not as much stable before major curr -encies due to heavy INR fluctuations				You can invest in assets in most currencies & can choose to receive payments in your local currency. Major currencies like GBP,USD, EURO are more stable with less fluctuations. So the investment value remains stable.
3		Most India based QROPS allow you to withdraw a  lumpsum of upto 33% of the pension fund on retirement.				In most of the OFF Shore QROPS you can withdraw the entire pension fund except for the 70% of the value transferred from depending on the local rules.
4		Usually offers India based  investments. So returns on investments are moderate				Can offer a wide choice of investments, including share,mutual funds & packaged investment products across the Globe.
5		India based schemes often have complex charging structu res.So its hard to tell whether you are getting value for your money.				Comparitively cost is less & remains uniform through out the term.
6		Once transfer is done to a India based QROPS, the fund gets locked & can't move your pensions to any other alternat ive scheme later if required.				You can take away your pension fund wherever you go &  wherever you want
7		You will not be known exact ivestment details & Investmen t managers.				Expert investment Managers will use their expertise in identifying the emerging markets & potential stocks, Mutual Funds, & other best investment options that can deliver excellent returns. You will be known where exactly your corpus gets invested.

Who am I? 

Let me introduce myself. I am Ravi kumar I have been working as a Financial Advisor for more than 5 years. I have been instrumental in transferring pensions for relatively good number of doctors & other professionals who have relocated from UK to India & other jurisdictions overseas. I promise to offer quality service & my service covers existing Pensions review, Free QROPS Consultations & Guide, Transfer Recommendation Report and much more.

Please contact me for an informal chat about the transfer scheme with my following Contact details.

Mr Ravi Kumar. Financial Consultant (Code: 60272381), Exide Life Insurance Co Ltd.

Branch- B 21, # 28, 6th floor, Centenary building, M.G Road, Bangalore-560 001.
Cell:     +91 9844519872, +91 9980927393
Email:  ravi.sampige@gmail.com