Pension Portability: What Follows You, What Doesn't
The money you've paid into retirement systems is more portable than you think -- and less portable than you hope.
Two Systems, Two Rulebooks
Every retirement plan you have ever contributed to falls into one of two categories, and the rules for moving abroad are entirely different for each. State or public pensions are the ones funded by mandatory payroll deductions: US Social Security, UK State Pension, German gesetzliche Rentenversicherung, Swedish allmän pension. Private pensions are everything else: employer-sponsored plans like 401(k)s, personal plans like IRAs, UK SIPPs, Swedish tjänstepension, Australian superannuation. When you relocate, these two systems behave almost nothing alike. Mixing them up is the most common and most expensive mistake newcomers make.
State Pensions: Aggregated, Not Merged
Inside the EU and EEA, Regulation 883/2004 coordinates state pensions across member states. Your contribution years aggregate -- if you worked four years in France, seven in Germany, and three in Spain, each country counts those fourteen years for eligibility, then pays a pro-rata benefit based only on what you contributed locally. You do not get one combined pension. You get three separate payments, and you apply to each country's authority individually when you retire. Outside the EU, the equivalents are bilateral totalization agreements. The US Social Security Administration maintains roughly 30 of these, with countries including Germany, the UK, Japan, South Korea, Canada, Australia, and most of Western Europe. They prevent double payroll taxation while you work abroad and let you combine credits toward eligibility. Check whether an agreement exists between your countries before you move -- the answer changes your math significantly.
Private Pensions: Stay Put, or Move with Caution
Your private retirement accounts usually stay where they are. US 401(k) and IRA balances do not transfer to a foreign pension system -- they remain invested with your existing provider, and you can generally continue to hold them as a non-resident, though some brokerages (Vanguard, Fidelity) restrict new contributions or trading once you move abroad. You can withdraw abroad, but the tax treatment depends on the treaty between the US and your new country, and on whether your new country recognizes the tax-deferred status at all. UK SIPPs can often be kept open as "expat SIPPs" administered by international-friendly providers. Swedish ISK and pensionsförsäkring accounts become administratively complicated once you leave Sweden -- the favorable tax treatment is tied to Swedish residency and may not survive the move.
QROPS and the Transfer-Scheme Trap
For UK pension holders, QROPS -- Qualifying Recognized Overseas Pension Schemes -- allow transfers of UK private pensions into approved foreign schemes. In theory this can simplify life if you are permanently abroad. In practice, the QROPS market has attracted aggressive advisors, opaque fee structures, and outright scams. Transfer fees of 5-10% of the pot, ongoing charges of 1.5-2% annually, and illiquid underlying investments are common. HMRC maintains a live list of approved schemes, but inclusion on the list is not an endorsement -- schemes are removed regularly when they breach rules. Treat any unsolicited QROPS pitch as a warning sign. If you are considering a transfer, verify the scheme directly against the current HMRC list and get written fee disclosures before signing anything.
Questions to Answer Before You Move Money
Default to Leaving It Alone
Unless there is a concrete tax or administrative reason to move a private pension, the safest default is to leave it invested in your home country and claim benefits remotely when you retire. Most major providers can pay into foreign bank accounts. The cost of moving a pension is front-loaded and often irreversible; the cost of leaving it alone is minor paperwork and occasional currency conversion. When in doubt, do nothing for the first two years while you figure out whether your move is permanent.
State pensions aggregate across borders through EU coordination and bilateral treaties, but pay out country-by-country. Private pensions generally stay where they are and should only be transferred when the tax case is clear and the receiving scheme is regulator-approved. Verify any transfer against HMRC or equivalent lists before signing, and default to leaving private balances invested until your move is settled.
Explore Country Guides
See how these topics apply in practice across different countries: