March 2010
RATS – a Jersey Success Story
In the last few years, Jersey has radically changed its pension legislation and now, arguably has some of the best and most attractive rules of any country in order to encourage pension planning. Historically, Jersey largely relied upon large UK insurance groups to provide the facilities for personal pension plans. However, changes to the plans offered did not keep pace with those of their parents in the UK making the Jersey schemes progressively less attractive to the investor. Finally the crunch came when these insurance groups indicated an unwillingness to offer annuities at a later stage.
Jersey Income Tax Department implemented Retirement Annuity Trust Scheme (RATS) legislation to encourage a new framework of private local pension provision. A number of locally based groups have now established themselves as RATS providers and this is now the preferred option for both clients and advisers for many retirement planning requirements. The plans offer flexibility and importantly they allow an alternative method of providing retirement income from the traditional annuity option. These are particularly attractive to individuals with larger sums to save for retirement.
Jersey regulators should be congratulated for implementing an excellent framework which whilst similar to the UK has been adapted for the needs of the Island. The attractiveness of these and other schemes were greatly enhanced by the increase of the annual contribution limits to £50,000 and also by allowing direct employer contributions to personal schemes including RATS.
Pegasus is a leading adviser in relation to RATS and other retirement planning schemes for Jersey residents for details contact information@pegasus-fs.com