Guernsey May Overhaul Pensions Regime
by Jason Gorringe, Lowtax.net, London
31 October, 2016
Guernsey's financial services regulator, the Guernsey Financial Services Commission, has released a Discussion Paper outlining a potential approach for modernizing the supervisory framework for the provision of private pensions.
The Paper has arisen as a result of a request from Guernsey's legislature to propose a modern approach to retirement savings and pensions product supervision and regulation.
It follows the revision of the Commission's Retirement Annuity Trust Scheme (RATS) Rules in 2015 and a consultation in 2014 that set out three objectives: finding out how the cost of providing for a pension could be reduced; how a self-invested pension option could be established; and giving consideration to restrictions on pension investments.
The Paper says that currently the only legislative foundation for different types of schemes is the island's Income Tax Law. It also notes that the Commission's Retirement Annuity Trust Scheme rules and commercially drafted practice notes apply by direction of a decision of the Director of Income Tax.
The Commission proposes that an approach to developing the pensions framework could be to follow this approach and incorporate the requirement for supervision and regulation through direct amendment of the Income Tax Law.
The proposed framework would apply to all types of pensions: group, corporate, and personal - both domestic and international. The framework as proposed involves various permutations of requirements around different types of pension. The Paper recognizes that this could be viewed as quite complicated at first and may be difficult to graft onto the Income Tax Law.
The Commission is seeking to generate discussion and debate on the proposed framework and welcomes feedback. A series of presentations and workshops may be arranged towards the end of November, subject to demand.
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