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Frequently Asked Questions

What exactly is a Jersey Personal Pension trust?

The Jersey Personal Pension Trust is a local pension plan that is approved by the Jersey Comptroller of Income Tax. It is a Jersey trust arrangement that enables individuals to save for their retirement in the most tax-efficient manner, and also receive an income from it when they retire.

How can I be sure it is secure?

The Jersey Personal Pension Trust uses a Jersey trust structure to invest and hold your retirement savings on your behalf. The trustee of the Jersey Personal Pension Trust is Sector Trust Company Limited, a Jersey trust company that is regulated by the Jersey Financial Services Commission for the conduct of trust company business, pursuant to the Financial Services (Jersey) Law 1998.

In addition, the funds and investments that make up your pension plan are held for your benefit in the trust by the trustee, where they are advised on by regulated financial advisers and managed by regulated product providers and fund managers.

How do I know the money is mine?

Your completed application form establishes a dedicated sub-trust in your own name. This ensures that your pension plan is legally separated from other members and that your pension assets are individually identifiable within the trust.

Why could I not have been offered one of these before?

In December 2007, certain changes were made to the local Jersey Income Tax Law, for the first time enabling the use of Jersey Trusts for personal pension planning. Up until these changes were made, the majority of Jersey residents were limited to the use of insurance company schemes as provision for their retirement.

What is different about the Jersey Personal Pension Trust?

The Jersey Personal Pension Trust is a single structure that can be used not just to provision for retirement, but also to draw an income from whilst in retirement. For the first time local residents can have a single retirement planning structure for life.

Furthermore, this same structure enables local residents to ensure that their retirement savings remain in Jersey and form part of their estate when they die.

What if I already have a pension plan?

You can leave your existing plan where it is, or you can transfer any existing approved personal and corporate pension plans into your Jersey Personal Pension Trust. As an HMRC approved Qualified Recognised Overseas Pension Scheme (QROPS) you can also transfer in any legacy UK pension schemes you may have.

It is essential that you discuss this with your financial adviser to help you decide if this is the best option for you.

How do I contribute to my Jersey Personal Pension Trust?

You can contribute to your Jersey Personal Pension Trust on a lump sum or regular monthly basis.

To contribute on a regular monthly basis, you will need to complete a �regular contribution� form, which your financial adviser will provide you with.

Lump sum contributions can be made by completing a transfer form, which your financial adviser will also provide to you.

Can my employer make a regular contribution to my Jersey Personal Pension Trust on my behalf?

Yes, with the help of your financial adviser and the consent of your employer.

How much can be contributed to my Jersey Personal Pension Trust?

From 1st January 2009, the total annual payments by an individual into their approved personal pension plans, is limited to �50,000 or that individual�s total relevant earnings for that year, whichever is the lower amount.

Am I still able to benefit from tax relief if I contribute to a Jersey Personal Pension Trust?

Yes. You can get 100% tax relief on all allowable contributions made to your pension plan, up to the maximum detailed above, for the contributions made in total to all the pension plans you may have. Please discuss this with your adviser.

Pension contributions are the most tax efficient way of saving for your retirement. The annual allowance, if not used, cannot be carried forward into the next financial year. If you don�t use it, you lose it!

What will my pension plan be invested in?

Your financial adviser will help you to establish a selection of investments for your pension plan that are suitable for your retirement planning needs.

How can I be sure my pension plan is performing well?

Your pension plan will be reviewed regularly by your financial adviser. At a minimum, this will be carried out on an annual basis. Moreover, you can monitor its performance at any time online, by clicking here.

You can also request a review and update from your financial adviser at any time you wish.

I�m just about to retire. Is a Jersey Personal Pension Trust relevant to me?

Yes. You can transfer all of your accumulated pension schemes, personal and corporate, into the Jersey Personal Pension Trust. This will enable you to take up to 30% of these accumulated funds as a tax-free cash lump sum, whilst remaining in control of your pension assets throughout your retirement.

When can I take the accumulated benefits from my Jersey Personal Pension Trust?

You can start taking pension benefits from your Jersey Personal Pension Trust any time after the age of 50.

How can I take the accumulated benefits from my Jersey Personal Pension Trust?

You can take benefits from your Jersey Personal Pension Trust in a number of ways:

  1. Tax-free lump sum � You can take up to 30% of your plan�s accumulated value, tax free, when you choose to retire.
  2. Invest the rest in funds that are most appropriate for your circumstances, in order to generate a retirement income; and/or
  3. Buy a traditional annuity with some or all of the remaining proceeds of your pension pot.

What happens to my pension plan if I die before retiring?

If you die before you retire, the accumulated pension assets from your Jersey Personal Pension Trust will pass to your estate, tax-free.

What happens to my pension plan if I die after retiring?

If you die after you have retired, i.e. taken your tax-free cash lump sum, the remaining pension assets from your Jersey Personal Pension Trust will pass to your estate, net of Jersey income tax at the standard rate.

If you die after you have retired, leaving a surviving spouse, then the remaining pension assets from your Jersey Personal Pension Trust will pass to your spouse, net of Jersey income tax at half the standard rate.

Alternatively, your surviving spouse has the option to leave your Jersey Personal Pension Trust in place and continue to draw benefits from it. The estate will ultimately be subject to tax at the standard rate of Jersey income tax when your surviving spouse dies.

Can I still buy a traditional annuity?

Yes. If you prefer the assurance of a guaranteed income for the rest of your life, you still have the option to purchase a �traditional� annuity from an insurance company. Your financial adviser can arrange this for you.

Please note that if you use all your accumulated pension assets to purchase such an annuity, your Jersey Personal Pension Trust will cease and there will be no unused assets to pass on to your estate, when you die.

What happens if the trustee is unable to continue to act?

The Master Trust contains a specific clause that requires the existing trustee to appoint a new regulated trustee, by legal instrument, before being able to retire. In the event that the existing trustee is not entitled by law to appoint a replacement, the power to appoint a new trustee will vest in the President of the Jersey Law Society.

What happens to my pension plan if my current adviser is unable to continue advising me?

In the event that your existing Financial Adviser is unable to continue to advise you, you will need to find a replacement adviser. In the meantime, your pension plan investments will only be changed if your new adviser makes a recommendation to the trustee to do so.

Glossary

Establishment - The early part of a pension plan's life, where it is being set up and any transfers in are being made.

Provisioning - The middle part of a pension plan's life, where the plan is growing in value as the investments generate returns, and the plan holder (and/or their employer) are making significant, and usually regular, contributions to the plan.

Investment - The process by which the cash paid into the plan is used to purchase investment assets such as bonds, equities and funds, which offer capital growth and possibly dividends, by which the value of the plan increases. The process is driven by the investment advice, and is designed to align the investment performance with the plan holder's cash flow needs, and the amount of investment risk they are willing to be exposed to.

Drawdown - The third stage of a pension plan's life, in which the plan holder is able to withdraw funds (their income), whilst the remaining assets continue to offer capital growth. Further contributions can still be made. The plan holder may still be employed at this time, but in all cases will be aged 50 or more.

Approved scheme - Only schemes (or plans) approved by the Comptroller of Income Tax allow the plan holder to benefit from income tax allowances on contributions to the scheme. These must be declared on the personal tax return.

Occupational scheme - Another name for an employer's pension. However, some pensions, including the Jersey Personal Pension Trust allow an employer to make contributions to a personal scheme owned and controlled by the individual. In such cases, this can be additional to, or instead of, an occupational Scheme.

Scheme - Another name for a pension, or pension plan. Often used for Occupational pensions provided by employers.

Fund - A word with several meanings. A Collective Investment Fund (CIF) is a type of investment asset, an alternative to individual equities and bonds. �Funding� a pension is taken to mean making contributions (cash) to the plan, which will be used to purchase investment assets such as funds, bonds and equities. �Funds� can mean cash or investment funds, so we have tried to avoid using �funds� to minimise confusion.

Allocation rate - term to define the proportion of pension plan cash spent on purchasing investment assets. As an example, 99% allocation means �99 in �100 is used to purchase the investment assets.

Financial adviser - The person who makes recommendations to the client or applicant.

Investment manager - the person appointed to use the money in the pension plan to maximise returns through choosing and purchasing appropriate investment assets for the client.