Retirement Benefits Schemes (Amendment) Bill

The purpose of the Feedback Statement is that it sets out the response of the Isle of Man Financial Services Authority (‘the Authority’) to consultation feedback on the Retirement Benefits Schemes (Amendment) Bill.

The consultation focused on proposed amendments to the Retirement Benefits Schemes Act 2000 (‘RBSA00’) and related changes to the Financial Services Act 2008 (‘FSA08’) and Insurance Act 2008 (‘IA08’).

The proposals aim to modernise the pensions regulatory framework, strengthen consumer protection, and align with international standards.

The consultation ran from 4 July to 1 September 2025, following an extension from the original closing date. It generated 11 responses from pension service providers, insurers, law firms, and industry associations.

Respondents provided detailed feedback on the proposed legislative changes. The Authority thanks all contributors and remains committed to ensuring the revised framework is proportionate, effective, and workable in practice. Future secondary legislation and guidance will be subject to public consultation.

The key themes from responses were the following:

• Support for Modernisation and Risk-Based Regulation – Broad agreement on the need to update the framework and introduce licensing for pension providers
   
• Requests for Detail and Clarity – Stakeholders sought more information on exemptions, transitional arrangements, and practical application of new requirements
   
• Proportionality and Competitiveness – Concerns about compliance burdens particularly for smaller schemes and international arrangements
   
• Defined Benefit Funding – Recognition of the importance of a statutory funding regime, coupled with calls for flexibility and proportionality

Following review of consultation feedback, the Authority has made some refinements to the Bill and provided some clarifications, including:

• Licensing Framework – Confirmed phased implementation and enabling powers for exemptions
   
• Definition of Administrator – Amended to allow for potential exemptions to be specified, e.g. in respect of outsourced service providers, where appropriate
   
• Guidance Status – Revised to remove the last subsection and ensure continued judicial discretion to take guidance into account, rather than mandatory consideration
   
• DB Funding Regime – Timeframes moved to regulations to allow some flexibility; winding-up deadlines aligned with UK standards. Exemption and modification regulation powers will allow for flexibility and proportionality in application
   
• Regulatory Safeguards – Added explicit protection for legal professional privilege and appeal rights for warning notices and directions etc.
   
• Civil Penalties – Clause 51 has been removed from the Bill, with the intention of updating the civil penalty provisions in the RBSA00 through the Financial Services (Miscellaneous Provisions) Bill once that Bill is finalised. This will allow issues to be addressed, including narrowing the scope of persons that may be subject to civil penalties, where appropriate

The revised Bill seeks to enhance the Authority’s ability to regulate pension service providers and pension schemes effectively while maintaining proportionality and competitiveness. It seeks to modernise the existing regulatory framework, allowing for a more risk-based approach that supports member protection and maintains alignment with international standards.

The Authority will progress the Revised Bill through Tynwald. Detailed provisions, including licensing exemptions, DB funding regulations, and governance requirements, will be developed in secondary legislation and guidance, subject to consultation and parliamentary approval.