Fidelity International Launches Employer Financed Retirement Benefit Scheme for High Earners

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Fidelity International has launched an Employer Financed Retirement Benefit Scheme (EFRBS) to offer additional solutions to employers who employ high earners impacted by tax changes announced in last year’s Budget.

As a result of high earners being hit by this new tax on pensions we expect EFRBS to become a mainstream solution for employers. To help employers we are providing an off-the-shelf packaged solution to reduce their costs and ease implementation.

Higher rate tax relief on money saved into pension plans will be reduced from 6 April 2011 for employees with incomes over £150,000, including pension contributions.

EFRBS are employer funded, tax efficient unapproved trust based pension schemes. Assets are held in offshore investments to reduce the impact of tax on investment income. Other benefits of EFRBS include:

  •     No limit on contributions allowed
  •     National Insurance is not paid when contributions are made
  •     UK income tax or capital gains tax does not apply to investment returns within the EFRBS
  •     Benefits can be taken as a 100% lump sum (in this case NI may be liable on distribution), or in the format of the UK registered scheme (25% lump sum with the remainder purchasing an income)
  •     Allows employees to choose how to invest their assets at retirement as there is no requirement to buy an annuity

Fidelity’s solution is based on its existing Multinational Pension model which has been run successfully for many years. Fidelity provides a selection of 52 funds covering all major asset classes, along with administration. Trust services will be provided by a trust company of the employers’ choice. Members will have full access to Fidelity’s PlanViewer tool which allows them to monitor their accounts, generate benefit statements and make switches.

Julian Webb, head of DC at Fidelity International, says: “As a result of high earners being hit by this new tax on pensions we expect EFRBS to become a mainstream solution for employers. To help employers we are providing an off-the-shelf packaged solution to reduce their costs and ease implementation.”

Notes to Editors

FIL Limited and its subsidiary companies serve the major markets of the world by providing investment products and services to individuals and institutional investors outside the US. Any opinions expressed are made at the time of writing and can be subject to change without notification.

For further information, please contact:

Keren Holland    
Fidelity International    
020 7074 5262    
07852 330570

Anne Read
Fidelity International
020 7961 4409
07850 549839

Press Office Address: Fidelity International, Kingswood Place, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP

SSO1009/na

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