Attention! Do you know where all of your assets are?

Many residents of Bermuda, such as native-born individuals, multinationals integrated into the Bermuda family culture, and globally mobile guest workers have rights to foreign pensions in other countries. Often, they are not aware of these pensions, or have (surprise!) completely forgotten the factual circumstances.

In presenting many international financial planning workshops in Bermuda over the last 15 years, I’ve often taken the opportunity to ask participants about their nationalities, birthplace, relationships to family and country connections. Of course, an abstract of these questions need to be asked carefully, you understand — so as not to be construed as personally invasive.

— What nationality are you?

— What citizenship?

— How many passports do you have?

— Were you ever a United States green card holder?

— Were you ever considered a resident of the United Kingdom or Canada, for instance?

— Where was your birthplace?

— What nationalities / citizenships are (were) your parents? Did they ever emigrate to another country for permanent settlement?

— If married, tell me about your marital record: Who are you are married to currently — where was he /she born, number of nationalities and passports?

— Were you married before and what was his / her country of origin, work record, and citizenships?

— Did you ever work in another country? Where and how long?

At first, clients often look a little affronted. Imagine just meeting someone and asking these rather personal questions, but there is a very good reason — raising awareness of forgotten financial assets, particularly invested pensions. Records abound of the compounding effect of small pensions invested over time, appreciating rather significantly in some cases. Take the composite case examples below.

You are a 60-year-old Bermuda resident individual approaching retirement. You have resided and worked abroad. Many years ago, you lived in the United States as the spouse of a US citizen. He / she was the only major, very largely compensated breadwinner. The marriage ended after a disastrous 12-year relationship. You divorced. Then, accepted employment in Canada for a number of years, before finally returning to Bermuda for the final 25 years of your working career.

The above narrative reveals an interesting fact pattern. In overview, it appears quite possible that there may be additional pension income due you from three different country sources.

You are a 55-year Bermuda teacher. You developed significant experience during employment in the United States and Bermuda. You love and are committed to your job; but time is getting short. Your thoughts turn to retirement. However, not enough saved as yet. When asked what the current value of your US state teacher’s pension, you are astonished. You did not even realise that you had accumulated this pension, it was so long ago.

Would you believe that individuals caught up in the transition between country residences when they even know they have left pensions in other countries, have no idea what they are worth! Nor have they kept copies of employment records, marriage / divorce papers, or contact information for the pension benefits administrators?

As you approach the last five to 10 years pre-retirement, it is particularly critical in today’s economic environment time to review all of your finances. This exercise will help you keep to a budget, too! Review your pension and other investment allocations; see if your savings goals are on target, compare results and records to see just what you own and where you stand. If you have worked in other countries develop a chronological tracking chart to review your employment history, withholdings, deductions / pension allocations.

Why should you do this? Because you may have accrued enough foreign employment earnings credits to apply for — and receive — a foreign government (or employer) pension in your own right. You also may be eligible for some type of a pension from another country through your rights of marriage, widow(er) hood, or disability through your own record, your spouse, former spouse, or possibly your parents’ work records.

For instance, if you are divorced or widowed whether you are a US citizen or not, and you were married to the US person for more than ten years, you may have a right to file a claim for US Social Security benefits (based on his / her US citizen employment social security record) upon your prescribed retirement age.

True Anecdote. After one particularly interactive financial planning workshop, five ladies very close to retirement came forward with further questions about US spousal social security benefits. All of them had been married for various lengths of time to United States citizens. Several had lived in the US, the others had not. When I politely inquired of one lady as to how long she had been married to her US spouse, she replied: “17 years.” From the way she referred to her ex-husband, I then asked if he was dead. She said, “No, the [expletive deleted], but I wish he was!”

Her great gleeful satisfaction arrived when she applied for, and began collecting half of his US social security benefits!

Note that individual situations may vary. Many people who may be entitled to a small pension say: “Why bother? It is just so much aggravation.” Wading through government bureaucracy and endless paper trails is never a picnic at the beach. Never the less, even $200 per month buys something: gas, bus and ferry passes, basic food. If you have paid into another country’s coffers and could recoup some of the investment in your dotage, shouldn’t you at least try?

Next: Where to find foreign country pension information and an overview of how their pensions are structured relative to your cross border transition life experiences.

Retirement and Pension information will be posted to the website, www.marthamyron.com

Under the Bermuda Financial Fundamental Review: Retirement, Pensions & Benefits and Benefits and Planning Your Financial Life, Calm starting the week of June 7, 2014.

Martha Harris Myron CPA PFS CFP JSM Masters of Law: International Tax and Financial Services, Summa Cum Laude

Appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland

President: The Pondstraddler* Life™ Consultancy providing international financial planning for the challenging lifestyles of multinational individuals and their families residing, working, crossing borders, and straddling ponds in the North Atlantic Quadrangle.

www.marthamyron.com Contact: martha@pondstraddler.com