UK Company Pensions for Higher Earners

EFRBS (Employer-Financed Retirement Benefits Schemes)

From April 2010, UK personal income tax rises to 50% on earnings in excess of £150,000. In 2011, tax relief on pension contributions reduces, tapering down to 20% for earnings above £180,000. The combined effects of higher income tax, lower tax relief on pension contributions, with the tightening strait-jacket of benefit limits such as the Lifetime Allowance, have made traditional pensions arrangements unattractive to employers with higher earning employees. There is an alternative. An alternative which can be around 40% more tax-efficient than a traditional, tax-approved defined contribution scheme.

Employer-Financed Retirements Benefits Schemes (EFRBS) have become widely recognised as an attractive alternative to pension provision for higher earning employees. EFRBS provide a means to maximise pension contributions and pension benefits, in a bona fide pension scheme which allows maximum flexibility for employees, with tax efficiency for both employer and employees.

Isle of Man EFRBS

The Isle of Man’s international pensions legislation, combined with its excellent regulatory environment, make it an ideal jurisdiction for establishment of EFRBS schemes.

The Isle of Man, through the Retirement Benefits Schemes Act 2000, has established a dedicated regulated retirement scheme framework for international pension schemes. Trustees and administrators of such schemes are regulated by the Isle of Man Insurance and Pensions Authority (IPA) which oversees also the Island’s successful insurance industry. Formal, but measured, pensions regulation adds to the bona fide credentials of EFRBs established in the Isle of Man.

EFRBS in the Isle of Man avail of formal tax exemption under section 50B of the Income Tax Act 1970.

Boal & Co provide a comprehensive range of administrative and other complementary services for EFRBS, including:

• scheme documentation, including draft deed and rules
  
  
• scheme establishment and tax approvals
  
  
• provision of corporate trustee
  
  
• administration (where required), including:
  • allocation of contributions to individual member accounts
  • investment switches
  • internet viewing access for clients to their pension scheme administration records
• HMRC returns.

Boal & Co’s range of EFRBS services is built upon the solid foundations of our market-leading position in offshore self-administered pension scheme solutions, for clients including Fortune 500 and other leading multinational companies.

A dominant position, and many years’ experience in the Isle of Man pension sector, underpin our proposition for EFRBS schemes.

To discuss your EFRBS requirements, please contact Gary Boal or Mark Kiernan on 01624 606606.

EFRBS Brochure