Domestic Retirement Benefits Schemes Framework
The Retirement Benefits Schemes (Domestic Schemes) (General Administration) Regulations 2004, which came into operation on 1 November 2004, established an infrastructure concerned with the management and administration of domestic retirement benefits schemes authorised under the Retirement Benefits Schemes Act 2000.
All domestic retirement benefits schemes must register with the Authority. Most domestic schemes must register as authorised schemes. However, certain schemes may be registered as either recognised schemes or permitted schemes (subject to conditions).
A registration guidance flowchart is provided on the Primary Legislation page. This flowchart was created by the Authority to assist prospective applicants. However, it does not constitute binding guidance. Original legislation should always be consulted for legal purposes.
Copies of the necessary application forms relating to the registration of domestic schemes may be found on the Pension Registration Forms page.
There are a limited number of exceptions to this mandatory registration requirement, details of which may be found in the Retirement Benefits Schemes (Excepted Schemes) Regulations 2001, a copy of which may be found on the General Regulations page.
Registration with the Authority, and compliance with the necessary registration requirements, does not confer tax approved status upon a scheme. Information concerning tax approval and its associated conditions may be obtained from the Income Tax Division of Treasury. An application for the grant of tax approved status, if required, may however be made on the appropriate registration application form.
In addition to legislation made under the Retirement Benefits Schemes Act 2000, certain retirement benefits schemes are also subject to Social Security pensions legislation. Further information regarding Social Security pensions legislation is available on the Pensions News page of the Isle of Man Government’s website.
The key objectives and benefits of the domestic framework
The Isle of Man’s domestic retirement benefits scheme legislation establishes a sound governance template for non-statutory domestic retirement benefits schemes, with the object of ensuring a safe environment for local employers who wish to make provision for retirement through trust-based arrangements, as well as eligible individuals who wish to take advantage of domestic tax legislation.
The domestic framework is tailored and proportionate, taking into account the frameworks that exist elsewhere, and includes substantial flexibility for product design that allows the objectives of employers and individuals to be accommodated. A solid foundation for retirement planning has been enabled by the legislation, ensuring that schemes are operated by appropriately registered schemes administrators who must adopt strong corporate governance, and that certain members’ rights are enshrined in law.
The framework also allows for the bespoke supervision of retirement benefits schemes, their trustees and registered administrators. This allows the Authority to adapt quickly to changing circumstances, which in turn adds to the quality of protection afforded to scheme members and prospective beneficiaries, whilst at the same time protecting the reputation of the pensions industry in the Island and elsewhere, and aiding in the reduction in the extent to which it is possible for any pensions business to be used in connection with financial crime.
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