International Pensions Scope

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International Pensions Scope

• 30,000,000 Ex Pats world-wide
• 14,000,000 in Europe across 15 Countries
• 3,200,000 in UK
• 2,450,000 in Italy
• 1,800,000 in Germany
• Out of 141 million EU working population
• Huge (growing) market

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International Pensions Offer

• Need Cross border Tax neutral Pension Vehicle
• Offering Multiple Member with Multiple tax rates
• Pensions are about deferring tax- pay tax once
• Difficult and expensive to receive tax credits on
  the way in across different tax structures
• Better to pay tax upon creation of wealth not
  when pension is in drawdown
• IOM International Pensions are struck after all
  tax

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Pensions-Carrying Risks?

• The Isle of Man Approach
• Flexibility
• Transparency
• Good Regulation

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Pensions and Risks

• Main Risks
• Longevity
• Investment Risk
• Second Risks
• Taxation Risks
• Legislative Changes
• Death Disability
• Career Breaks
• Who is carrying these risks?
• Who could/should carry these risks?

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Retirement Income Duration Sensitivity (German
Model)

• Baseline
• Couple retire at 65 years with 1m in assets
• Assume
• Equity allocation 35 with 7 pa return
• Fixed Income allocation 65 with 3.5 pa return
• Overall fixed income/equity returns 4.7
• Monthly redemption 5,000
• Monthly nursing home costs 3,000
• Inflation 1.5
• Life Expectancy of 86 Years
• Source Dr Reinhardt Schink Allainz May 06

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Retirement Income Duration Sensitivity (German
Model) Events
Source Dr Reinhardt Schink Allianz May 06
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International Pensions Risk
R i s k
Employee
Employer
DC
DB
Source Dr Reinhardt Schink Allianz May 06
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International Schemes - Eligible Assets

• Quoted shares
• Fixed interest securities
• Commercial property
• Bank and building society deposits
• Unit trusts
• Insurance policies
• Unquoted securities
• Specie transfers and related party transactions
  permitted

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International Pension Solutions Summary 1

• Cost benefits one stable jurisdiction
• Suitable for Expatriates
• Currency of choice
• Outside scope of EUSD
• Benefit of Third Party Oversight and Management
• Contributions may reduce taxable profit
• Some NI enhancements
• Advantages for the Employer and the Employee

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International Pension Solutions Summary 2

• The Isle of Man-a secure home for the new world
  of International pension arrangements?
• Simcocks Pensions DO NOT give Investment Advice
• Introducers of this new product remain Clients
  Advisers
• Huge opportunity for Intermediaries/Investment
  Concerns

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The Isle of Man A SECURE HOME FOR PENSIONS
TIMOTHY C BOLES MANAGING DIRECTOR SIMCOCKS
PENSIONS LIMITED