IPPS were developed to proved efficient pension arrangements for companies with a mobile workforce and one spread across a number of different jurisdictions. It is often impossible for an international organisation to maintain its employees in one single pension plan for either legal or taxation reasons – the IPP in is therefore often the most efficient and flexible pension solution. Schemes are also available for individuals. Transient expatriates will work in several jurisdictions throughout their career. Each country may not have a pension system that they can contribute to and there may be no state pension entitlements. Rather than start a pension in each country in which they live and work, they can use one pension fund based in a suitable jurisdiction, throughout their working life.
An IPP is established in an offshore jurisdiction such as Guernsey which is home to neither the employer nor the employees. Guernsey IPPS offer a range of advantages to both employer and employee:
* Investment flexibility – the trustees can tailor investments around requirements of individual employees;
* A number of employers can join the same IPP if they form part of the same multinational group;
* No obligation to purchase an annuity on retirement;
* The entire fund can be paid out as a lump sum;
* No restrictions on the contributions made by employer or employee;
* Flexibility in employer contribution rate;
* No limits to the value of the benefit/fund which can be accumulated for an individual member.
Download our IPPS product note HERE