NORWICH Union’s exit from the island as a pension provider has opened the doors to increased development of retirement annuity trust schemes. The vehicle for retirement provision, which is unique to Guernsey, has traditionally been perceived as expensive and, as such, accessible only to the wealthy.

But now a handful of providers has introduced multi-member schemes which bring down the expense and open up a Rats to the masses.

Leading the pack is Argyll Investment Services with its Fortress Pension Plan, offering a Rats with minimum monthly contributions of just over £100.

Director Stuart Place said it was now commonly accepted that to maintain quality of life through retirement, a States pension alone was not sufficient to support an individual’s income needs.

‘Everyone with an income should have a savings plan of some kind and almost everyone who is eligible to save for their pension should do so as a priority.’

Mr Place said the hard work was getting the Flexia funds for Fortress up and running.

But with them in place, Argyll, with NMT Financial Services as trustees, had set up a highly cost-effective solution, he said.

‘As soon as Norwich Union announced its plans to withdraw pensions from the island, we started putting the funds in place to offer this alternative.

‘By making the scheme open to contributions of as little as £102.50 a month, we have made it accessible to a large percentage of the working population.’

With Fortress, each individual gets a sub-trust established specifically for their needs, which can be funded individually or by their employer or a combination of the two.

In the two latter cases, if someone changes job, the sub-trust continues as that person’s and can be continued as a sub-trust scheme or commuted to a stand-alone personal Rats at minimal cost. ‘This makes it very portable and it is the solution that can remain with you until retirement,’ said Mr Place.

‘The States of Guernsey offers tax incentives to employees and the self-employed to contribute to pension savings.

‘The Fortress Pension Plan offers great flexibility. It provides low-cost access to highly professional investment managers who have a consistent and dependable track record.’

Fortress offers a straightforward choice of three investment risk levels, which can be changed at any time.

‘You can increase, decrease or temporarily freeze contributions and add lump sums at any time, subject to annual limits, without additional or hidden charges,’ he said.

‘Rather than having to buy an annuity on retirement, you can have the income drawn to your own requirements with professional help.

‘Any value left after death goes to your appointed beneficiaries.’