STM Fidecs, which is a part of and which increasingly is going by the name of Gibraltar-headquartered STM Group, currently operates three QROPS schemes in Gibraltar, and recently launched a fourth in Malta, the STM Malta Retirement Plan. It plans to launch a fifth in Jersey this month, through STM Fiduciaire, an STM Group affiliate.
In markets in which STM does not have its own pension administration facilities, it will use the white label services of other companies, after ensuring that these firms meet STM’s standards for competence and service, according to STM director David Erhardt.
STM has agreed such deals with undisclosed firms in both the Isle of Man and New Zealand, and was in the process of setting up similar arrangements in Guernsey and Switzerland, according to Erhardt.
He said the plan is to have in place a network of QROPS (qualifying recognised overseas pension schemes) in numerous jurisdictions up and running by mid-year, with other jurisdictions added as needed in the future to cater to market conditions.
STM is not the first company to offer QROPS in more than one jurisdiction, but it is believed to be the first to make it a key feature of its business model.
Listed on London’s Alternative Investment Market, STM Group Plc posted a pre-tax profit in 2009 of £700,000 on revenues of £8.5m.
Like other Gibraltar-based pension administrators, the group’s QROPS operation has been frustrated by issues surrounding the way pension income over those over age 60 is taxed in the British overseas territory, which resulted in administrators in the British overseas territory voluntarily suspending all pension transfers there since mid-2009.
As reported here last month, one of the benefits for STM of its new Malta QROPS is that the scheme will enable it to transfer to Malta immediately the UK pensions of people on its waiting list for one of its Gibraltar schemes, with the promise of free transfers to Gibraltar once the problems there concerning QROPS have been sorted.
‘One size ≠ all’
“The important thing to remember is that one QROPS does not fit all,” Erhardt said, noting that clients frequently need to respond to changes in legislation in different jurisdictions affecting QROPS, or changes in the tax codes either where they are living or where the QROPS is located, without being penalised by hefty transfer fees. These have been known to run as high as £6,000.
“It is crucial that a QROPS be held in a place that works most efficiently with the taxation system of the country in which an individual lives; for example, in a country with which an individual’s resident country has a double taxation agreement,” Erhardt added.
“In addition, if someone changes their place of residency, they also may need to move their QROPS.”
Erhardt said he foresees the Q-Wrap, as STM is calling its multi-jurisdictional product, as a step in the direction of pan-European pensions, which do not now exist but which he believes are inevitable.
STM Fidecs was created in March 2007, when the parent company was admitted to AIM, at the same time it acquired Fidecs Group Ltd of Gibraltar. STM Fidecs had been founded in 1989 by Tim Revill.
