The government of Jersey has rolled out a second consultation on what the introduction of regulation on pension activities should achieve.
While pension businesses are regulated by the Jersey Financial Services Commission (JFSC), there is no targeted regulation for these types of activities.
The consultation on the regulatory framework is looking to protect the “rights and interests of people using Jersey-based products and services, and to help and support business growth in the pension sector”, the government said.
The respondents to the first consultation emphasised that pension scheme members should be protected, as they cannot be expected to be knowledgeable or experts.
Similarly, many respondents called for pension scheme administration and related advice to fall under the regulatory remit as well.
Global remit?
One aspect that the consultation is looking into is whether international savings plans (ISPs) should fall within the scope of the pension regulation.
These are schemes, similar to pensions, that can be set up on the island by a non-Jersey-based employer or multinational company for its employees.
They are established under an irrevocable trust, with its trustees regulated by the JFSC.
A spokesperson for the Jersey government told International Adviser: “International savings plans are currently available and being marketed worldwide by Jersey companies.
“Whether [they] are within the scope of a Jersey Pension Regulator is a question government is asking in the consultation paper.”
Joe Moynihan, chief executive of promotional body Jersey Finance, told IA: “The current consultation includes a specific question about whether Jersey ISPs, which were launched last year, should fall within the scope of a pension regulator.
“Jersey Finance will work with industry to collate a response to this consultation. The outcome of the consultation will provide a clear path forward for establishing a holistic and proportionate framework for regulating pension products in Jersey.”
The government’s consultation on pension regulation will close on 28 February 2020.
International impact
ISPs have received a lot of interest from global players, especially the Middle East, as many people in the region rely on end-of-service gratuity benefits for their retirement savings.
But companies have not been required to ringfence this payment, leaving many to take it out of cashflow.
Zurich has teamed up with the Dubai International Financial Centre and rolled out is employee workplace savings scheme in January 2020, but businesses outside the freezone are not yet able to join it.
Some, therefore, have been turning to overseas jurisdictions to set up retirement and savings schemes so they can set aside funds to cover the end of service payment throughout the employee’s tenure.
