Dougie Elliott, chair of the Isle of Man Association of Pension Scheme Providers, said the group had always been in favour of pension freedoms, and the measures announced by treasury minister Alfred Cannan on 20 February are a “sensible end result”.
“However, with regard to the lead up to the introducing of pension freedoms to the island, I cannot help but agree with the speaker of [the Isle of Man parliament] Tynwald, Juan Watterson, who said there was a ‘lack of transparency’ by the treasury minister in relation to the budgeting process.
“We were in the dark as to what would be included, which is strange as we have historically had a great relationship with government,” Elliott said.
The association is still concerned, Elliott said, about the possibilities of pensioners losing money to fraud or receiving poor investment advice.
“We feel more could have been done in advance to prevent this and to help to protect the vulnerable.
“However, we are lucky in the Isle of Man to have a strong investment advisory industry and a robust regulator who, together, should help mitigate this risk,” he said.
Minister responds
Cannan said, during his budget speech, that freedoms will allow many island residents to access their pension funds after turning 55-years-old, similar to legislation introduced in the UK in April 2015.
In an interview with International Adviser, Cannan said he had received a “fairly positive response” to the pension freedom measures from the industry following his speech.
He said pension providers were given the opportunity to comment during the public consultation stage.
The consultation ran from 18 July to 15 September 2017 and received 68 responses, the majority of which were in favour of a fully flexible scheme or a degree of pension freedom.
“I think the association of pension scheme providers, which is a fairly small group, were cautious about the change, it is fair to say, like anybody in their position should be,” Cannan said.
“But I think the government’s responsibility is to act in the best interest of the citizens, and we feel it is the right for people to have much more flexibility and fluidity around the management of their pension schemes.
“Now the dust is settled I hope the government and the industry can work closely together on this and get the measures working,” Cannan said.
Budget speech
In Cannan’s speech, he hit out at pension provider “lobbyists” who opposed the freedoms.
“I am not surprised by this mr president, given the fees these companies and their directors receive for handling and managing billions of pounds of pension funds but let me be clear: this is not their money and they most certainly are not in a position to judge that people cannot be trusted with their own money,” he said.
In response to this statement, Elliott said: “It is most disappointing that rather than include us in the process he elected to criticise the industry in his speech.
“However, we do not wish to dwell on this, but to rebuild the previous good relationship,” he said.
