Understanding International Savings Plans (ISPs)

Helpful guide - 10 frequently asked questions about International Savings Plans.

January 15, 2019


This brief guide is designed to provide the answers to the fundamental questions about Jersey's International Saving Plans (ISPs). Jersey introduced ISPs on 1st January 2019, after an amendment to the Income Tax Jersey (Jersey) Law 1961, to allow Jersey to provide these popular schemes for the first time. Terry Northcott Associate Director of Corporate Services answers some of the commonly asked questions about International Savings Plans and the difference between them and regular pensions.

Q1. What is an International Savings Plan (ISP)?

Put simply. It is a plan that can be put in place in Jersey by international employers to help their employees save for retirement and/or other life events.

Q2. So, it’s like a pension?

In a way, but the key difference is that a Jersey ISP provides a much more flexible framework for employers and employees than an ordinary pension can offer.

Q3.  So how is the ISP more flexible than a pension?

With a pension, there are usually strict rules around when an employee can take benefits, and this generally can’t take place until an employee has reached retirement age. With a Jersey ISP, the employer can provide a plan that allows its employees to take benefits much earlier.

Q4. Why is there a need for ISPs?

International employment practices and retirement needs have changed dramatically over the last ten or twenty years. Employees are now much more internationally mobile and are likely to work for several employers over the course of their working life or for one employer in several jurisdictions. To attract and retain employees, employers need to be able to provide savings plans that are as flexible as the roles they offer.

Q5. How flexible is an ISP?

Very. Jersey law does not dictate the benefits that can be offered under an ISP. This means that employers can design their ISPs to meet the needs of their staff and can even allow for one ISP to provide different classes of staff different benefits. For example, the ISP can enable employees to benefit upon leaving employment, or upon any number of other ‘life events’ such as redundancy, ill health, divorce or purchasing a property. Different benefits can be offered to different classes of employee, such as international employees and locally resident employees.

Q6. Is this a good idea to have such flexibility?

The idea of having one long-term pension arranged by your employer to provide for you in retirement is looking increasingly outdated, but the need to put in place a long-term savings plan is unlikely ever to go away. However, the reality of the modern world is that employees now desire and demand greater control over their benefits and their retirement planning. This is precisely what a Jersey ISP offers. That said, as well as being a stand-alone solution, an ISP can easily run in conjunction with traditional pension plans or any other employee benefit schemes.

Q7. What are the key requirements of an ISP?

An ISP must:

Q8. How are ISPs taxed?

One of the key attractions of the Jersey ISP is that it is officially tax-approved by the Tax Office in Jersey. What this means in practice is that an ISP is a tax-neutral structure in Jersey. Income and gains held by a non-Jersey resident within an ISP will not be taxable in Jersey and the distributions made out to employees will also not be taxable in Jersey. However, the trustees will be required to make regular submissions to the Tax Office in Jersey, ensuring a comforting degree of regulatory oversight to which the trustee must submit.

Q9. Why Jersey for ISPs?

Primarily because we are good at this stuff! Employers must look to establish their plans in politically stable jurisdictions that have the capability and experience to manage them for the long term. Jersey has been administering trust-based savings plans for decades. Over this time our trust law and our legal and regulatory framework have developed into the internationally respected system that you see today. The ISP seeks to build on this pedigree, and it is for this reason that all ISPs must have a Jersey-law trust and a Jersey trustee who will oversee and be regulated by the Jersey Financial Services Commission.  In this way, the good governance of the ISP can easily be ensured.

Q10. What can an ISP be used for?

Terry Northcott
Terry Northcott
Associate Director - Corporate Services
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Are you looking for an International Savings Plan for your employees?

Fiduchi is a regulated provider of trust and company services, and therefore its experts are able to assist you in all aspects of ensuring continued compliance in the constant changing landscape. At Fiduchi we take a pragmatic approach to ensure your interests, whether personal or business, are safeguarded. Because of this, we don’t apply a ‘one size fits all’ methodology, rather the contrary. Our director led teams can assist you to the creation of International Savings Plans and Retirement Trust Schemes.

For more information, call our Corporate Services team on: +44 (0) 1534 755155

Alternatively, you can send us a message us below:

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