Basically, they’re Personal Pensions – individual pension pots, which can be grouped together, like a GPP, for employers who want to provide their work force with a pension as part of their benefits package.

Where they differ from a GPP is that pensions can be really tailored for the workforce of a particular company so that different categories of employee (or even individual employees) can benefit from the freedom of investment and flexibility offered by a SIPP structure

There has been a move (stampede?) away from conventional pension arrangements, mainly on the grounds of costs, disappointing investment returns (eg with-profit policies) and regulatory and legislative burdens (themselves costly), which are becoming increasingly onerous with each passing year.

In addition, demographic changes are taking place, whereby the workforce has, of necessity, become more mobile with changing working patterns. These are already well established and will continue apace, with ever-increasing life expectancy and later and more flexible retirement coming into play.

A different type of scheme that recognises these changes is required, and that is precisely one of the things CSIPP does.

CSIPP can be a suitable alternative to:-

Occupational Money Purchase Schemes

Additional Voluntary Contributions

Group Personal Pensions

In short CSIPP offers:-

• Great flexibility
• Extensive investment choice, as advised by the IFA as being suitable for that class of employee
• Controllable forecastable and capped costs
• Can be truly tailored to an individual employer’s needs

For an employer

• Pension provision for an agreed fee
• Agreed contributions, set by the Employer
• Contributions and investment choice can vary for different classes of employee No employer involvement in choice of an individual's investments
• Reduced employment costs
• Tailored pension solution in one scheme for all from CEO to junior staff
• Retention of financially aware staff
• No Trustee liabilities
• Possible NI savings(converting bonus into pension contributions)

For Employees

• Choice of how to pay their contributions – annual or monthly
• Can transfer in from other arrangements
• Portable fund if they change jobs
• Has control of death benefits (no need to provide spouse's benefits if single)
• Simplicity of structure
• Benefits of economy of scale
• Choice of investments

Why the MW CSIPP?

It’s based on the Acorn SIPP, which is a low cost starter SIPP for smaller funds, which means that as a solution it will be cost-effective. It also has a fee structure that is capped once a total fund reaches a certain level. It allows the widest range of investments - basically anything that is permitted by law. Because we’re not tied to any bank or insurance company, there is no need to use any particular fund or bank account. You can use any of them, although we have negotiated high interest banking with a number of financial institutions.

The investments can typically include:-
Cash
Insured funds
Quoted stocks and shares
Unit or Investment Trusts
Hedge funds
Property funds
REITs
Gilts
Trustee investment bonds

And for funds over £70,000 there is also the option for holding direct commercial property and also investing in unquoted shares.

You may wish to structure investment choice or contribution levels depending on the type of employee, with a wider choice or level for senior management, changing through the hierarchy, or even individually.

The CSIPP has a corporate trustee – MW Pension Trustees (IOM) Ltd - so there is no need for employers or members executing trust deeds or holding trustee meetings. That is our responsibility. Because all investments are SELF invested, it means that the employer does not bear the responsibility of recommending a particular insurer eg. Equitable Life, as the chosen scheme provider.

It is possible to transfer in funds from other arrangements, either on the Isle of Man or the UK. This in turn could reduce an individual’s administration costs.

The agreed level of contributions can be paid into the CSIPP bank account at RBSI on the agreed date, using BACS, minimising the administration and costs.

What does it cost?



Less than you might imagine – it is typically less than a Stakeholder!

It depends how you set it up. But fees largely depend on:-

Number of employees
Range of investments required
Services required (eg. Attendance at presentations)
Number of transfers in from other arrangements

Our workload can be greatly reduced by preparation work by the employer and their advisers regarding scheme structure including:

Eligibility of membership
Categories of membership
Investment structure
Employer/employee contribution levels
Assessment of members’ existing funds – protected rights
Availability of discharge papers
Availability of company money laundering paperwork

Fees will normally be charged for:

Installation of scheme
Annual management fee (annually in advance or monthly)
Transferring benefits out
At commencement of a pension benefit
On taking benefits

Fees can be paid by the employer or from members’ funds. They are subject to VAT

Fees will be agreed in advance, once a scheme structure is finalised, and will be capped at an agreed level – the maximum fee payable once a certain fund value is achieved. (The maximum may be subject to increases in line with inflation) This means that over time the relative cost of scheme administration will actually drop.