So, what are the changes?
Changes to the Fiduciaries Law
The States of Guernsey has given in principle approval to the introduction of primary legislation to regulate the Guernsey pension industry. Whilst the new legislation is being drafted, interim measures will be introduced from 30 June 2017 which will see an amendment to the legislation which regulates trustees, directors and corporate service providers (amongst other things).
The formation, management and administration of pension schemes will be added to the list of "regulated activities" under the Regulation of Fiduciaries, Administration Businesses and Company Directors etc. (Bailiwick of Guernsey) Law, 2000 (as amended) when carried out by way of business, which will put pension business on the same footing as other regulated fiduciary activities – a fiduciary licence will be needed to carry out pension business in or from within the Bailiwick of Guernsey (subject to any available exemptions).
New Pension Rules
The amendment to the Fiduciaries Law will allow for the introduction of rules and regulations specifically designed for the pension industry. The Pension Licensees (Conduct of Business) & Domestic and International Pension Scheme Rules 2017 will also come into force on 30 June 2017 and will be the focus of the attention of those in the industry over the coming months.
The Pension Rules will apply to all holders of a full fiduciary licence who are licensed under the Fiduciaries Law to carry on the formation, administration and management of pension schemes in or from within Guernsey and to all pension schemes (occupational and personal, domestic and international) administered by such licensees, unless specifically agreed otherwise by the GFSC.
Whilst the Pension Rules will not apply to "lay" persons providing services to pension schemes (i.e. those not acting by way of business and therefore not caught by the changes to the Fiduciaries Law) it is anticipated that they too will consider adhering to the Pension Rules as best practice (where appropriate).
Changes to Income Tax Law
The Income Tax Law will be amended to provide the option for all pension schemes (including international pension schemes which previously sought recognition under sections 40(o) or 40(ee) of the Income Tax Law) to seek approval. This will enable consistent reporting of information and will allow those types of schemes to benefit from the regulated status of other approved schemes under the new regime. It is expected that a new section 154A will be added to the legislation to deal with international occupational and personal pension schemes that are granted approval.
The draft amendments to the Income Tax Law have not, at the time of writing, been published so the details are yet to be confirmed.
Withdrawal of the RATS Rules
Retirement annuity trust schemes will be regulated alongside other pension schemes under the Pension Rules, which will consequently revoke the RATS Rules.
