Domestic Schemes
Upon taking responsibility for the supervision of pension schemes the IPA conducted an extensive review of the Isle of Man's domestic pension legislation. Throughout the review process the Authority consulted extensively with the pensions sector, both within the Isle of Man and elsewhere, regarding the proposed new framework.
The new domestic pensions framework
As a result of this consultation, the Retirement Benefits Schemes (Domestic Schemes) (General Administration) Regulations 2004, were approved in the October 2004 sitting of Tynwald, and came into full effect from 1st May 2005. The regulations establish a new pension framework for the Isle of Man under the Retirement Benefits Schemes Act 2000.
The new regulatory framework operates independently of the existing pension scheme tax approval process. It is necessary for all schemes to be registered with the Authority in addition to seeking tax approval from the Assessor of Income Tax. It is also important to note that much of the pension legislation previously made by the Department of Health and Social Security will remain in force whilst a project is undertaken to assess its future appropriateness in consideration of the new regime.
Moving to the Isle of Man
Individuals who come to reside in the Isle of Man should be able to transfer their existing occupational or personal pension rights into Isle of Man based arrangements. The Isle of Man has historically operated a system that is closely aligned with that in the UK and imposes similar restrictions on the payment of contributions, and the payment of benefits at retirement.
Those who are not afforded access to an occupational scheme through their employer, are able to establish a personal pension arrangement.
The current limits for personal pension plan contributions are as follows:-
| Age on 1st day of tax year | % of earnings |
|---|---|
| Under 36 | 17.5% |
| 36 - 45 | 20.0% |
| 46 - 50 | 25.0% |
| 51 - 55 | 30.0% |
| 56 - 60 | 35.0% |
| 60 and over | 40.0% |
The current employee contribution limit for occupational schemes is 15% of earnings.
State retirement benefits
For information regarding the state retirement benefits please visit the Department of Health and Social Security web-site where full details of the current pensions are available.
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