The Isle of Man Insurance and Pensions Authority (IPA) has introduced global pensions regulations wh...
The Isle of Man Insurance and Pensions Authority (IPA) has introduced global pensions regulations which allow multi-national firms to offer occupational and personal pensions benefits, regardless of where their employees live in the world.
Multi-national firms, such as Shell and AstraZeneca, have been looking to provide access to such schemes for several years as some of their employees live in different regions of the world for anything between 3-15 years at a time in order to carry out their work.
However, until now, most firms have been unable to provide pensions while staff are based overseas simply because UK schemes do not allow overseas membership and local schemes do not suit the needs of regularly migrating employees.
Mike Lightfoot, marketing executive at the IPA and former IFA at City Financial in the Isle of Man, says regulations have been created to offer "extreme flexibility" but are designed to protect members and ensure companies adhere to local regulations and administration.
"What we do not want to do is tell schemes how to run things, we do not want to tell them when people must retire, or how much [money] people must put in or take out. But we do expect to hear from consultants and advisers who have to represent companies in three or four different countries and need schemes to meet both corporate and local requirements," says Lightfoot.
"From a tax point of view, we can mould the schemes to meet the tax requirements and regulatory requirements in each jurisdiction. Even though the Isle of Man is an offshore jurisdiction, we hope the schemes will be no different to domestic schemes in the Isle of Man because regulations are about creating access to pensions rather than tax advantages," he adds.
IoM regulations have been created on the back of schemes which already exist on a small scale but are written in trust law rather than pensions legislation, and officials have already received a handful of enquiries from multi-national firms.
While the schemes will be strictly regulated to ensure schemes executives are complying with their requirements, few rules have actually been laid down by the IPA because every company has different needs and operates in a variety of countries.
Tax regulations will also be one of the last aspects to secure, continues Lightfoot, as the IPA will need to agree tax arrangements with each of the members' jurisdictions.
The Isle of Man has also left authorization of the scheme with the IPA rather than the Treasury or Revenue office, says Lightfoot, unlike UK occupational pensions schemes which must be authorized by the Inland Revenue and meet tough administrative measures.
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