Having valuable options and guarantees is an important consideration, and you should know what these are. Whilst the value of these options and guarantees may be eroded when the payment of such benefits is subject to NZ tax at up to 39% (38% in 2009/10, 37% in 2010/11 and 36% in 2011/12), it may be worth leaving funds in the UK a little longer to continue to grow tax-free until closer to retirement.
It is also possible in some circumstances to continue to make additional contributions to some UK schemes and attract UK tax relief. This requires that a UK scheme is maintained, which may in turn mean that delaying the transfer is beneficial.
A major consideration is the cost of transferring your funds to NZ. Most companies charge a one-off percentage fee for this, which means that your NZ-based retirement fund immediately has a lot of catching up to do at the same time as having to pay NZ tax on its future income.
If there is a chance that you will not retire in NZ, then it is possibly better to keep your pension fund in the UK. For instance, in the fullness of time and subject to future legislative changes, if you acquired NZ citizenship and retired in Australia, under current rules it is possible that your UK pension could be paid to you free of UK and Australian taxes. This is a complex tax area however and the risk of future changes to the rules should be factored into your decision-making.
Summarising the reasons above and including others:
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On comparison, the benefits, security, investment expertise and subsidised administration costs offered by the UK scheme may be superior to any that could be achieved in New Zealand;
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Older policies may have guaranteed annuity rates built into the policy;
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You may be unsure about staying in New Zealand, and may in fact return to the UK;
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Inferior or uncertain returns of New Zealand superannuation funds;
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The loss of return occasioned by the charges during the transfer process;
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Unfavourable exchange rates;
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Getting the transfer wrong resulting in large UK tax liabilities;
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Possible exposure to UK Inheritance Tax on the transferred fund;
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Easy access to the fund may not be best for particular people;
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The loss of tax-exempt status of retirement savings;
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In some circumstances benefits may be taken earlier from the UK scheme;
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Further contributions may be made to some schemes that attract UK tax relief;
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The decision is irreversible (although transfers back to the UK are possible, but not to the same scheme).
