Transferring Irish Pensions to the U.S.: Your Options Explained

Moving abroad does not mean leaving your financial past behind. For Irish nationals living in the U.S., deciding what to do with a PRSA, occupational pension, or personal retirement plan is one of the most important financial choices you will face. The decision carries tax, estate, and long-term investment consequences.

At Skybound Wealth USA, I work with Irish expats to evaluate pension options across jurisdictions and to build retirement strategies that are both compliant and efficient. Here’s what you need to know.

Option 1: Leave Your Pension in Ireland

The simplest approach is to leave your pension where it is. It will continue to grow tax-deferred in Ireland, with no transfer costs. However, as a U.S. resident you may have to declare the account on FATCA (Form 8938) or FBAR, and distributions will be taxed as ordinary income in the U.S. This route often suits smaller balances or those who want to avoid disruption.

Option 2: Transfer to a QROPS

A Qualifying Recognised Overseas Pension Scheme (QROPS), usually based in the UK or EU, can be attractive if you want to consolidate pensions or avoid certain Irish transfer taxes. The drawback is that QROPS are generally not U.S.-compliant. They can create PFIC exposure and complicated reporting requirements, with transfer fees often in the 5–8 per cent range. Unless you plan to retire outside the U.S., QROPS rarely make sense for American residents.

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Option 3: Transfer to a U.S. IRA or 401(k)

Despite common misconceptions, Irish pensions cannot be rolled directly into a U.S. IRA or 401(k). U.S. schemes will not accept pension transfers from abroad, and attempts to route them via QROPS or other wrappers can lead to punitive taxation and foreign trust complications. If your focus is on building U.S. retirement assets, contributing directly to your IRA or 401(k) is the safer, compliant path.

Option 4: Take a Lump Sum

Cashing out your Irish pension provides immediate access and the ability to simplify estate planning by holding funds in the U.S. But this option carries heavy costs: lump sums are taxed in Ireland (potentially up to 41 per cent) and taxed again in the U.S. upon receipt. Exit charges may also apply. This approach is generally only worth considering for smaller accounts or where funds are urgently needed.

Tax and Compliance Considerations

Irish rules can apply unauthorised payment charges of up to 20 per cent on certain transfers, alongside income tax. U.S. rules mean that pension payouts are always taxable once distributed, and there is no treaty relief for direct transfers. U.S. residents must also remain compliant with FATCA and FBAR reporting whenever thresholds are met.

Making the Right Choice

The decision depends on your long-term residency, pension value, and financial priorities. Leaving the pension in Ireland may be cost-efficient but limits flexibility. QROPS can work for those leaving the U.S. but not for long-term residents. U.S. transfers are not feasible, and lump sums require very careful planning. A personalised review is the best way to weigh these trade-offs.

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How Skybound Wealth USA Can Help

I support Irish expats in modelling each option, assessing costs and tax exposure, and building a retirement roadmap that integrates Irish pensions with U.S. savings. Our role is to coordinate with cross-border tax specialists, ensure compliance, and help you structure retirement income that works across both systems.

Secure Your Retirement Across Borders

Your Irish pension can still serve you well in the U.S., but only if you make the right decisions today. The earlier you review your options, the more control you will have over costs, taxes, and your long-term financial security.

Contact me for a complimentary pension transition assessment and let’s build a strategy that protects your retirement on both sides of the Atlantic.