The introduction of International Savings Plans (ISPs) to Jersey at the start of 2019 is benefiting law firms, trust companies and banks on the island, Lisa Springate, Head of Technical at Jersey Finance told thewealthnet.

ISPs are targeted at multi-national companies with globally mobile employees. They are saving plans, which differ from traditional pensions schemes, and are available to non-Jersey residents.

According to the Jersey Finance website they are “more flexible as they allow a pay out to employees before the normal minimum pension age, either on termination of employment or on the occurrence of a major life changing event such as redundancy, ill health or divorce.”

An advantage for firms seeking to establish an ISP in Jersey is that the island has “over 13,000 finance professionals and 50 years’ experience in wealth management” with a strong regulatory framework, Ms Springate said. In addition, its political and economic stability is attractive.

Ms Springate said law firms were benefiting from the structuring work, trust companies from the administration and banks from holding the assets.

These ISPs often involve large sums of money being managed for a large number of individuals. In some cases, the ISPs can be for hundreds or thousands of employees, like an airline company. For the banks there is the advantage of one overall account for the company. This means they can easy manage the money on behalf a wide range of individual employees of that company.

Ms Springate, who was a partner in a law firm before joining Jersey Finance in 2017, has noticed two different approaches from trust companies – those that are going for high volume and those that are not.

Larger companies with scale are investing in their IT platforms. This enables them to administer a large amount of assets for a high number of employees. This also has the effect of driving the cost down for the client company.

Other more boutique trust companies are not going for volume. Instead they are focusing on managing a lower number employees with higher level of individual assets, such as the senior management team.

Regardless of the approach, interest is coming from all around the world, Ms Springate said.

Jersey Finance representatives for the Middle East, Far East and Africa have said “tremendous interest has been shown in ISPs over the last few weeks”.

Funding has also been granted for a Jersey Finance office in New York, and Ms Springate also expects interest to come from there once it opens later in the year.

Much of the initial focus was on the potential for ISPs in the Middle East. This is because the Gulf region is expected to make the provision of this kind of plan mandatory. While accepting that the “time of this would therefore be right for Jersey in light of this,” Ms Springate said Jersey Finance had always anticipated that the product would have wider geographical appeal.

She cited a recent international pension plan survey conducted by Willis Towers Watson which found that global companies are seeking employee incentive solutions to be provided to their internationally mobile employees or local employees where local arrangements are inadequate or absent.

She went on to say that “the survey found that ISPs are offered by companies in over 20 business sectors, the key sectors being banking and finance, oil and gas, and industrials”.

As well as being very much welcomed by clients around the world, Ms Springate said the new product had been welcomed by Jersey-based professionals.

“Members of the finance industry have commented that they have not seen so much interest in a new product for some time,” she said. “They have referred to ISPs as innovation at its best.”

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