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IoM Public Sector Pension Overhaul Praised

by Jason Gorringe, Tax-News.com, London

22 November 2011


The new Chairman of the Isle of Man's Civil Service Commission, Alfred Cannan, has thrown his weight behind proposals from the Manx government to reform public sector pensions.

Cannan said the introduction of the Government Unified Scheme (GUS) would provide the island's civil servants with greater pension certainty and security going forward. Under the Scheme, approved by the island's legislative assembly, the Tynwald, the government plans to amalgamate 15 public service schemes into a single final salary scheme in order to bring pension arrangements under local control and make them simpler and more affordable. The unified scheme is set to take effect from April 1, 2012.

Cannon described the GUS as ‘demonstrably better’ than the deal on offer to many public servants in the UK.

"In comparison with the pension reform proposals coming from the UK, GUS provides our civil servants with both greater pension certainty and security in the future," he said. "Civil servants and related groups will be able to choose to protect both the current final salary basis of their pension and the age at which they retire. By contrast, the UK is proposing to ask members to work longer and to introduce a Career Average type of scheme going forward. This is likely to leave many in a worse-off position in the UK. The Isle of Man solution provides a demonstrably better deal for the island’s civil servants."

Contribution requirements from civil servants are to be increased however, Cannan admitted, although the government is to assist those on lower salaries. It is thought that increases will amount to no more than 1% of pay per year.

“Compared with the proposed increases in the UK, which will see some workers paying an immediate increase of up to 2.4% of pay, our solution is a much fairer deal for members,” Cannan said. “Although GUS requires scheme members generally to pay more, it will provide more choice and enable civil and public servants in the island to maintain a comparable level of benefits in the future at the same retirement age.”

“I look forward to progressing the implementation of GUS with the Civil Service staff representatives.”

A comprehensive report in our Intelligence Report series titled "The Lowtax International Pensions Report" which has an in depth view on The Mechanics of Pensions Provision, 'High-Tax' Country Pension Regimes and 'Lowtax' Jurisdictions In Which To Locate Pensions Savings, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report14.asp
TAGS: Isle of Man | economics | pensions | offshore pensions | fiscal policy | retirement | international financial centres (IFC) | offshore | social security

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