QROPS industry sources said the government was understood to be looking to tighten up on the way qualifying recognised overseas pension schemes (QROPS) are set up and run in the British overseas territory, as the number of such schemes has grown to 33, more than three times as many as it had two years ago.
In particular, the focus was said to be on ensuring that the key elements of any Gibraltar scheme administrator were based in Gibraltar and not “outsourced”.
However, Gibraltar Finance Centre director James Tipping stressed that the goal of any consultation would be to “further strengthen” the industry rather than crack down on it. He said that existing rules already required trust companies to meet certain conditions that limited the degree to which they could outsource key operations.
“The Government is keen to see this sector grow,” he added.
Marcus Killick, the outgoing chief executive of the Gibraltar Financial Services Commission, noted that the QROPS industry is supervised by the GFSC, which is “working with our stakeholders to ensure that such supervision and the regulations that underpin them are appropriate, effective and proportionate”.
“The Commission has always made it clear that the mind and management of licensed firms must reside in the jurisdiction,” he added.
Transfers resumed in 2012
The business of administering QROPS has taken off in Gibraltar since 2012. That was the year that the jurisdiction’s pension fund trustees resumed pension transfers from the UK to the Rock, after voluntarily suspending them for almost three years, pending resolution of what were understood to be concerns by HM Revenue & Customs.
According to QROPS industry sources, Gibraltar officials are concerned that the growing popularity of their jurisdiction among QROPS providers – many of which are setting up operations there from other places, such as the Isle of Man, the UK and Guernsey – could result in a lack of transparency about such businesses, and even present possible enforcement issues in the event that anything were to go wrong with a scheme.
“The regulator’s concern is that if something went wrong, they might not be able to control things, if key elements of the business were located elsewhere,” said one pensions industry expert who said he was familiar with Gibraltar’s plans.
Steven Knight, chairman of the Gibraltar Association of Pension Fund Administrators, said that it was “natural” for any government and industry that had witnessed the rapid growth that Gibraltar’s pensions industry has had to want to review current legislation and practice, “to determine if any further improvements are merited”.
“Both the local government and the regulatory authorities are keen to ensure Gibraltar’s reputation in the financial services sector continues to flourish,” he added.
As reported, Killick is leaving the GFSC next month, after a decade in the role of CEO. He is to be replaced by Samantha Barrass, who most recently has been an executive director at the Solicitors Regulation Authority in England and Wales. Killick has not said what he plans to do next, beyond hoping to remain in Gibraltar.