Stephen Ward, managing director of Spain-based Premier Pensions Solutions, says that a clause stating that only New Zealand residents or those employed by the New Zealand government are able to join a pension scheme based there, has been amended.
Ward argues that the latest draft, published on 12 October, makes certain amendments to the so-called “New Zealand criteria” (i.e. the section dictating that a person must be NZ resident etc) which mean QROPS will be able to continue to operate out of the jurisdiction.
In particular, Ward draws attention to an explanatory note within the Bill which states: “Superannuation schemes will be required to be for the purpose of retirement, with any other benefits paid or early withdrawal provisions being ancillary to that purpose. In addition, schemes will need to limit new members to those with a specified link to New Zealand (for example, employed by a New Zealand employer or residency) or meet prescribed requirements that would include lock-in and transfer requirements.”
The importance of this section, according to Ward, is that, while there is still a limitation to those with a specific “link” to New Zealand being able to join a superannuation scheme (or indeed a QROPS), it also allows for others who meet “prescribed requirements” to join one.
Ward also highlights a section in the actual bill itself which, he says, removes any ambiguity and leaves the option for non-New Zealand residents to join pension schemes domiciled in the country open.
The wording highlighted is as follows:
"Every superannuation scheme must meet the following registration requirements in addition to those in section 113:
(a) it must be a trust established and governed by a trust deed that is interpreted and administered in accordance with New Zealand law; and
(b) its purpose must be to provide retirement benefits directly or indirectly to individuals; and
(c) it must admit as members (both in its conditions of entry of scheme participants and in the way those conditions are applied) only either or both of—
(i) persons who meet the New Zealand criteria set out in subsection (2); or
(ii) persons who are the trustees or managers of a retirement scheme; and
(d) it must restrict redemptions or withdrawals (under the trust deed and in the way that the trust deed is applied) to redemptions or withdrawals for retirement purposes;…..”
Ward believes that if condition (d) is satisfied then this enables those who do not satisfy the New Zealand criteria to participate in a New Zealand superannuation scheme.
However, despite Ward’s convictions on the issue, Michael Reason, a New Zealand barrister and English lawyer who specialises in overseas pensions transfers, said his interpretation of the draft bill still implies QROPS will not be permitted.
Specifically, he references section 115 of the bill which states that the person joining the superannuation scheme must either meet the New Zealand criteria or, immediately prior to joining the scheme is a member of another New Zealand based scheme, or is living in or employed by a New Zealand company. IF Reason’s interpretation is correct, QROPS, as it currently stands, would not be permitted.