Local financial services provider IOMA Pensions has announced that its recently launched Isle of Man ‘50C’ QROPS can now access two partially capital protected notes issued by Barclays Bank PLC.
The Lifestyle Pension (Isle of Man) has been designed in accordance with the new ground breaking 50C legislative framework which allows post-transfer growth to be included in the lump sum payment paid to members, meaning that the final one-off cash payment could well exceed the 30% available from other jurisdictions.
The Lifestyle Protector 70 and Lifestyle Protector 80 notes are, according to IOMA, designed very much with the QROPS market in mind (and 50C in particular). IOMA Pensions Director Mike Batey explains: “Anyone involved with QROPS will certainly have noticed the level of debate created by the introduction of 50C. We always supported the technical argument that lump sums exceeding 30% can be paid in circumstances where investments perform well. But the reality is, as we all know, investments don’t always go as we want them to. We were therefore adamant that those attracted by the upside of 50C also have an investment option that protects the downside. These notes will protect member’s capital at 70% or 80% of the highest ever price.
Mr. Batey continued: “It is a QROPS requirement that at least 70% of the member’s transferred fund is available to provide an income and through these innovative investment products we can do just that. We had Barclays do some back testing on these products and Lifestyle Protector 70, for example, would have returned over 12% per annum between October 2001 and October 2011, the last few years of which were some of the most turbulent in decades. Our prospective QROPS clients have the comfort of knowing they have a good chance of realising a cash lump sum well in excess of 30% whilst also protecting the value of the fund required for income.”
The notes’ performance is driven by the multi-asset ARMOUR GBP index, which was developed by Barclays Capital to provide investment exposure to assets that have been outperforming the wider market.
IOMA Pensions has set about aligning the benefits of the 50C regime with the protection available in the Isle of Man. Mr. Batey added: “The Isle of Man is the only recognised QROPS jurisdiction that has a dedicated regulator for pensions. That means the scheme and the administrator has to be approved and continually audited. In addition, we have developed an investment choice with a UK listing underwritten by Barclays. If you are moving a UK approved pension into the QROPS arena you will be concerned by the protection available to you and I believe we have one of the strongest packages available in that regard whilst enabling all the advantages 50C has to offer in terms of benefits.”
