Growth and risk adapting to your way of life

Establishment – setting up your pension plan

The Jersey Personal Pension Trust is a Master Trust arrangement that allows individuals to participate by completion of an instrument called a Deed of Adherence, or sub-trust. On your completion of the application form, a sub-trust will be established to ensure that your pension rights are legally separated and individually identifiable within the Master Trust.

The Master Trust has been drafted under the Trusts (Jersey) Law 1984, and as such, is governed by the proper law of Jersey and is within the jurisdiction of the Royal Court of Jersey. Having established your membership of the Jersey Personal Pension Trust, the trustee is responsible for ensuring that your pension plan is administered and managed in an appropriate manner, throughout your life and on behalf of your beneficiaries.

Provisioning & investment – growing your pension “pot”

Your first priority must be to estimate your needs in retirement. Your adviser will help you make the choices to support your future plans, showing you how your pension will grow and how you can manage its growth at every stage of your life.

You can make your own contributions to your plan, and maybe arrange for your employer to contribute as well. You may even need to arrange for a pause in payments, when the demands of life are perhaps at their greatest - for instance, starting a family or taking a career break. Although it is always wiser to maintain regular payments, the Jersey Personal Pension Trust is flexible enough to allow you to change your contributions according to your circumstances.

You can transfer-in funds from your other approved pensions in order to consolidate them into one easily-managed plan. This way, you will have a much better understanding of where your hard-earned savings are being invested. You will also be able to know how much you have saved by accessing your account securely, online.

As ever, it is unwise to enter the world of pensions without expert guidance. The Jersey Personal Pension Trust has been designed to be provided by Jersey-based financial advisers. Your financial adviser will work with you to ensure that the Jersey Personal Pension Trust is the right pension plan for you.

Your adviser can help you make the decisions that ensure you get the best value from your pension, and will provide you with documented evidence of the advice given whilst establishing your plan. This way, you will have a record of what has been agreed with your adviser, what the costs will be, and how your choice of investments has been decided.

Your pension plan may be invested in funds that include a variety of asset classes, such as shares, property, government bonds and cash. The choice of investments will be influenced by the amount you need to retire on, the amount you can afford to save, your attitude towards risk, and the length of time you have before you plan to retire. Your adviser will explain all of these investment choices in detail, including the level of risk and growth potential associated with each asset class.

An annual review of your pension plan’s performance is a key part of the service provided by your financial adviser. It is your opportunity to ensure that your pension plan is on track to provide everything you expect when you retire. It is also your opportunity to take account of any changes in your personal circumstances since your last review.

Retirement options – meeting your needs, providing certainty

From the age of 50, you can use your Jersey Personal Pension Trust to:

1. Take up to 30% of your accumulated pension plan as a tax-free lump sum.
2. Pay yourself a retirement income from the remaining investments within your plan. The Trustee is obliged by law to control the maximum amount of income withdrawn each year, in order to ensure that you have sufficient funds for the remainder of your life. Your adviser will be happy to explain this process in greater detail.
3. Furthermore, if you prefer the assurance of a guaranteed income in retirement, you still have the option to purchase a ‘traditional’ annuity with the remaining investments.

Options on death – plan for your family's future needs

Pre-retirement: if you die before you retire, your Jersey Personal Pension Trust will cease and the entire proceeds of your pension plan will pass to the beneficiaries nominated in your application form, free of tax.

Post retirement: if you die after you retire, having chosen option 2 above, your Jersey Personal Pension Trust will cease and the entire proceeds of your pension plan will pass to the beneficiaries nominated in your application form, net of tax. This tax charge will be at the standard rate of Jersey income tax.

In the event that your nominated beneficiary is your surviving spouse, then the tax charge will be at half the standard rate of Jersey income tax.

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 suffer tax at the standard rate of Jersey income tax when your surviving spouse dies.