LOCAL residents with defined contribution pension schemes would still be able to purchase a retirement annuity if the only local provider pulled out of the market. The Guernsey Financial Services Commission has welcomed clarification from pension experts BWCI, but remains concerned about the lack of options available.

‘However, given the circumstances, we welcome the clarification by BWCI that the shortage of insurance companies prepared to issue annuities in Guernsey does not prevent the holders of personal pension policies from securing their retirement income,’ said the commission’s director of insurance, Alan Fleming.

He welcomed the company’s efforts in seeking new providers.

BWCI believes that a solution must be found if future pension provisions are to be guaranteed.

Last month the group and advocates Carey Olsen hosted a seminar at which the issue was raised by experts who were concerned that only one company offers ‘open market’ annuities in the Channel Islands and the Isle of Man.

These are annuities purchased by funds coming from company or personal pension schemes issued by other companies.

BWCI managing partner Stephen Ainsworth said that if Norwich Union, the sole provider, pulled out, annuities would still be available locally from the company that provided the individual’s personal pension policy.

‘Personal pension policyholders will thus always be able to secure their retirement income through an annuity, although there may be a limited choice of provider,’ he said.

‘The BWCI Group is continuing to work with the insurance industry to encourage other providers to enter the Guernsey market in order to increase the options available for both occupational pension schemes and for personal pension policyholders.’

At the seminar it was suggested that the States should step in and act as guarantor should Norwich Union close its local office. The company has said it is committed to serving the islands.