mast image

Impact Investing

IPE special report May 2018

Sections

Isle of Man's international package

On 1 January the Isle of Man took an important step towards becoming a key jurisdiction for international pension schemes. The Retirement Benefits Schemes (International Schemes) Regulations 2001 came into effect, creating a framework that enables IoM government- approved international retirement benefits schemes, catering for non-resident members or individuals, to be established on the island.
The latest act is part of a raft of instruments introduced by the government over the past 16 months to improve regulation of pensions, and applies to both occupational and personal retirement schemes. In October 2000 the Tynwald, the island’s parliament, passed the Retirement Benefits Schemes Act 2000 (RBSA 2000), legislation that established a broad pensions framework that applies to all schemes operating in or from the Isle of Man. As a further evolution, and in recognition that different considerations apply to domestic and international pensions markets, the Insurance & Pensions Authority (IPA) elected to develop market-specific legislation subordinate to RBSA 2000 by creating separate ‘international’ and ‘domestic’ regulations under the main act.
This approach enables both home and overseas markets to be catered for within the broad parameters of one overriding act, which is entirely consistent with the current ‘level playing field’ approach the island is adopting regarding new legislation.
“The intention is to pave the way for multinational employers, or individual workers undertaking overseas employment, to gain access to fully regulated offshore retirement benefit solutions. Unlike other offshore jurisdictions we are not necessarily looking towards a volume market involving small group schemes or personal pension. Rather we see the strength of our regulations being the ability for multinational companies and ultra high net worth individuals to tailor bespoke arrangements to suit various country specific, multi jurisdictional or personal circumstances,” says the IPA’s Michael Lightfoot.
This is possible because of the flexible approach the authority has adopted. The overall objective is to provide suitable protection to members and beneficiaries of Isle of Man based schemes. Having established set rules on those approved to act in relation to international schemes the IPA has avoided being too prescriptive regarding the way in which schemes are constructed, or the precise format or dates at which benefits can be taken by members.
The authority set out to achieve two main objectives, says Lightfoot: “Firstly our overriding remit is to ensure that all schemes authorised by the authority provide suitable protection for members and their beneficiaries, and equally instill high standards of governance and administrative practice on those administering international schemes. Having achieved this, due to the fact that the island is focusing on a global market we have avoided setting ‘hard and fast’ rules regarding scheme parameters. Indeed we have not incorporated any rules or regulations in relation to the format in which benefits can be taken, or set fixed parameters regarding contribution limits or retirement dates. The reason for this is that it allows offshore schemes to be constructed in close synergy with the parameters required to comply with many home country tax laws, and facilitates the development of ‘flexi’ schemes that can be written to secure benefits for workers in a variety of jurisdictions.
“As a result we believe that we have achieved the correct balance between establishing appropriate regulatory controls, and providing the market with a large degree of flexibility to develop tailored solutions.”
Each IPA-authorised scheme, whether it is occupational or personal, will be required to seek individual authorisation from the authority. As a result, members and their beneficiaries receive the reassurance that all aspects of the scheme with which they are associated will have been thoroughly assessed by the IPA prior to inception. Furthermore, it is a prerequisite of authorisation that a scheme must have an independent trustee. Employer and member protection is further enhanced by virtue of the fact that within the authorisation process the authority also has to approve the administrators and trustees of a scheme. Further legislation on domestic pensions is expected later this year.

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2435

    Asset class: CLOs.
    Asset region: Global.
    Size: USD 50m.
    Closing date: 2018-05-22.

  • QN-2436

    Asset class: Real Estate - Core Open-ended Real Estate Equity Fund (non-listed).
    Asset region: Asia Pacific.
    Size: Approx. CHF 70-100m per investment.
    Closing date: 2018-05-25.

  • QN-2438

    Asset class: High Yield Bonds.
    Asset region: US.
    Size: USD 300 million.
    Closing date: 2018-05-25.

  • RE-2441

    Closing date: 2018-05-31.

Begin Your Search Here