Isle of Man Pensions Governance Conference 2025 - Q&A

Hosted by Boal & Co and sponsored by Finance Isle of Man, the 2025 Isle of Man Pensions Governance Conference took place on Friday 7 November 2025. Featuring a mix of presentations, expert panels and breakout sessions delivered by leaders in the field of pensions from Boal & Co, the Isle of Man Financial Services Authority, CMS, Hymans Robertson, Keystone Law, Mercer and Grant Thornton, the conference attracted more than 100 delegates.

Engagement was high throughout the day with numerous questions received via Slido. With limited time for Q&As during the conference, we are grateful to our expert speakers for providing written responses to the unanswered questions below.

Please note – this content has been provided by third parties and does not reflect the opinion of Boal & Co and/or Boal & Co’s officers. The information provided in this article is for general information purposes only and does not constitute legal advice or regulatory guidance. If you are uncertain about your legal obligations, we encourage you to seek appropriate legal advice.

SECTION A - Isle of Man Financial Services Authority Questions

Andrew Kniveton, David Baker and Samantha Crookall, Isle of Man FSA

Pension Services – Revised Regulatory Framework: Implementation Timeframe and Transitional Arrangements

Q1 - How does the Authority plan to approach the transition to the new regulatory framework for pension service providers under the Financial Services Act 2008? What changes can pension service providers expect under the revised regime?

• The presentation provided an update on the Retirement Benefits Schemes (Amendment) Bill, the purpose of which is to provide the foundation for the revised regulatory regime in primary legislation.
• The proposal is to move the regulation of pension service providers to the existing regulatory framework under the Financial Services Act 2008 (‘FSA08’), subject to appropriate transitional arrangements, modifications and exemptions to work for the Isle of Man’s pensions sector.
• Pension schemes themselves will continue to be regulated under the amended Retirement Benefits Schemes Act 2000.
• The proposed changes would require authorised pension schemes to have an administrator and at least one trustee licensed under the FSA08. • Licensed administrators and trustees would be subject to business conduct and prudential regulation under the Financial Services Rule Book 2016 (‘Rule Book’).
• Once the Retirement Benefits Schemes (Amendment) Bill is finalised and begins the legislative process in Tynwald (estimated in Q1 2026), work will begin on developing the secondary legislation and associated guidance for the revised framework.
• The Authority plans to hold consultations on the new secondary legislation in 2026 and into 2027.
• Currently, it is estimated that the revised regime will be implemented in 2028, however this depends on the next stage of the project and the output from engagement with industry.
• Whilst some pension providers already provide regulated financial services activities as part of their wider offering, not all registered schemes administrators are familiar with the FSA08 framework. As such, the Authority plans to arrange a series of engagement and outreach sessions to raise awareness and consider views from industry on how the transition would best be managed.
• In terms of the changes pension service providers can expect, the Rule Book contains requirements on the following topics:
  - Financial Resources and Reporting
  - Client Money
  - Client Investments
  - Audit
  - Conduct of Business
  - Administration
  - Risk Management and Internal Control
• The Financial Services Act 2008 and Rule Book have accompanying guidance that have been developed over time, and shall continue to evolve, as needed. The Authority will draw attention to these in future consultations and seek views from industry on potential updates needed to adapt them to the pensions sector to ensure the Island can maintain proportionate and effective regulation.

Pension Services – Revised Regulatory Framework: United Kingdom Pensions Regime – Guidance

Q2 - Noting that the Isle of Man’s pension scheme regulation follows a similar approach to the United Kingdom (‘UK’), what’s the Authority’s approach to taking inspiration from and/or adopting UK guidance?

• As the Isle of Man’s regime was originally based on the UK’s, it makes sense firms may look to UK guidance where there is not equivalent guidance in the Isle of Man.
• By way of example, in terms of past engagement on the topic of DB scheme funding, the Authority’s understanding is that many firms are voluntarily following UK requirements.
• The aim of the Retirement Benefits Schemes (Amendment) Bill is to provide the statutory basis for the new regulatory regime. There’s more work to do on developing the detailed secondary legislation, which is due to start in 2026 and continue into 2027. Part of that work will involve discussions around the type of guidance industry would find useful.
• If there is a call from industry for the Isle of Man to adopt similar guidance to the UK, the Authority will consider this.
• It would be unusual for any jurisdiction to adopt another jurisdiction’s guidance wholesale, so the Authority would need to be selective over what guidance it chooses to adopt and how it is adapted to fit the Isle of Man’s regime.

Q3 – The Authority received four questions regarding the proposed changes to update and strengthen the regulatory framework for pensions. These included queries about the continued competitiveness of the Island’s pensions sector and comparisons with other jurisdictions.

• To inform this work, the Authority reviewed pension regulatory frameworks in other jurisdictions to identify areas for potential enhancement. These comparisons indicate that, in most jurisdictions, pension providers are subject to conduct regulation, even if indirectly (for example, through Trust and Company Service Provider regulation). It is noted that some jurisdictions are currently in the process of updating their own pensions frameworks and therefore may not provide the most suitable benchmark at this time.
• The proposed amendments aim to deliver a flexible regulatory framework that enables the Authority to tailor requirements proportionately to the risk profile and complexity of different scheme types. This approach supports efficient, risk-based regulation while minimising unnecessary administrative burdens. Appropriate exemptions and modifications will ensure the framework remains proportionate and aligned with the local pensions landscape.
• The Isle of Man was among the first offshore jurisdictions to introduce private pensions regulation through the Retirement Benefits Schemes Act 2000, which has supported the growth of the Island’s pensions sector. The proposed enhancements build on this foundation, reinforcing the Island’s reputation as a well-regulated and secure location for pension provision while supporting its continued competitiveness in this important sector.
• The Authority will work closely with pension service providers and other stakeholders as the framework evolves and remains committed to ensuring the revised framework is proportionate, effective and workable in practice.

Financial Services Act 2008 – Current Regulatory Framework: Guidance

Q4 – Where would be a good place to start for pension service providers to learn about the current regulatory regime under the Financial Services Act 2008?

• The Authority’s Financial Services Rule Book sets out the regulatory requirements for licence holders under the FSA08 and covers areas relating to business conduct, prudential matters, governance and risk management expectations.
• The Authority’s Supervisory Methodology Framework provides the current approach to the assessment of firm oversight based on risk and impact, proportionate to the size of the firm and the potential to disrupt the Island’s financial system.
• The Authority’s Legislation & Guidance webpage contains guidance for licence holders on the regulatory requirements under the FSA08 and Financial Services Rule Book.

Q5 – The United Kingdom and United States of America are looking at opportunities to reduce financial regulation and red tape. What is the Authority doing to ease the regulatory burden for Island firms?

• The Authority continues to operate its regulatory oversight role in line with its regulatory objectives, strategic plan and long-term goals.
• Much of how the Authority regulates is guided by international standards for supervisors of relevant sectors. The Authority continues to actively monitor development in other jurisdictions and assess how changes align to our Island’s needs.
• The Authority is acutely aware of the regulatory burden firms can be under. Where appropriate, the Authority aims to reflect and amend its engagement and oversight to support firms.

Financial Services Act 2008 – Current Regulatory Framework: Enforcement Action

Q6 – There has been increased local media coverage of the Authority taking enforcement action against regulated firms over the last year. What’s the Authority’s approach to enforcement and do inspections often result in enforcement activity?

• The Authority is not an enforcement-led regulator and only pursues enforcement action when it is considered proportionate, reasonable and appropriate to do so.
• Looking at inspection numbers as an example, statistics for 2024/25 show: o A total of 296 inspections carried out.- This included 98 event-driven, risk-driven and thematic inspections (both onsite and desk-based), as well as 198 beneficial ownership inspections.
  - The Authority’s internal governance referral panel, which determines the most appropriate use of Authority resources and remediation tools, met 15 times (not all these meetings arise from inspections).
  - From those 15 referrals, eight matters were referred to the Authority’s Enforcement & Intelligence Division for possible investigation and one matter to the Enhanced Supervision Team.
  - Referrals to the Enforcement & Intelligence Division do not necessarily result in enforcement action.
• Civil penalties can be levied on regulated entities as a result of successful enforcement actions. Settlement agreements include the publication of public notices that raise awareness of the findings of our investigations, along with key learning points for industry.
• These notices are not intended to ‘name and shame’ Island firms. They serve as an important reminder that all firms undertaking business in the regulated sector have an obligation to conduct their affairs in a manner that adequately mitigates the risks they face.
• The Authority requires businesses that adopt a higher risk model, or take on higher risk clients, to have appropriate expertise, experience and sophistication within their ranks.
• We have recruited some high-calibre investigators, and our Enforcement Division is working diligently to bring cases to a conclusion, as highlighted by the recent settlements published on our website.

Financial Services Act 2008 – Current Regulatory Framework: Discretionary Civil Penalties

Q7 – Civil penalties remain a consistent concern. We have a well-respected legal system. Can we write legislation so individuals are referred to the Attorney General’s Chambers to take to prosecution, taking advantage of the existing courts?

The Authority notes concerns that its enforcement process could be perceived as concentrating investigatory and decision-making powers. This model is common among financial services regulators globally, but it operates within a framework of checks and balances. In the Isle of Man, enforcement decisions follow the Enforcement Decision Making Process (‘EDMP’), which separates supervisory, investigatory, and decision-making functions across different Divisions in the Authority.

Individuals subject to enforcement action have the right to make representations at multiple stages, including to the Case Review Panel, and all decisions are subject to appeal to the independent Financial Services Tribunal¹. These safeguards ensure procedural fairness and transparency, consistent with international standards and the principles of natural justice.

¹ Isle of Man Courts of Justice - Tribunals 2

Q8 – How many fines has the Authority issued to date and what are the amounts including the highest?

Information about discretionary civil penalties (i.e. penalties for serious regulatory failings as opposed to administrative penalties for late returns etc.) is available on the Authority’s Enforcement Action webpage.

The amount of any discretionary civil penalties issued is determined as a percentage of the licenceholder’s relevant income (turnover from the relevant business lines) and, therefore, scales according to the amount of business undertaken:

• Level 1 = Up to 5% Relevant Income
• Level 2 = Up to 8% Relevant Income

Since discretionary civil penalty powers were introduced in 2015, the Authority has issued 21 civil penalties over a ten-year period, averaging around three penalties a year since 2019.

Financial Crime (AML/CFT/CPF): 2026 MONEYVAL Mutual Evaluation

Q9 – How is the Authority approaching the 2026 MONEYVAL Evaluation and is this different to its ‘Business as Usual’ activity?

• Work relating to the MONEYVAL Assessment is embedded as ‘Business as Usual’ within the Authority.
• The expansion of the AML/CFT Supervision Team in recent years reflects the separation of AML/CFT oversight from the wider Authority, ensuring dedicated focus and expertise.
• Firms are expected to maintain strong AML/CFT policies to safeguard their businesses from criminal exploitation and prevent harm to potential victims of criminal activity.
• MONEYVAL’s role is to verify that FATF standards are consistently applied across the jurisdiction, reinforcing the Authority’s regulatory objectives and strengthening the collective fight against financial crime.

Q10 – Has the Authority’s approach to businesses’ own risk assessments changed in preparation for the 2026 MONEYVAL Assessment?

• The Authority’s approach to businesses’ own risk assessments has not changed in anticipation of the upcoming MONEYVAL Assessment.
• While there have been specific thematic reviews, these are not driven by MONEYVAL.
• The AML/CFT Code has remained unchanged since 2019, and it continues to reflect the FATF 40 Recommendations, which themselves have not changed.
• Therefore, supervisory expectations are considered to be consistent and stable.

Q11 – What can the pensions sector expect from the 2026 MONEYVAL Mutual Evaluation?

• The Authority continues to deliver its engagement model for AML/CFT oversight, which includes planned inspections, thematic exercises and data requests.
• For the preparation of the MONEYVAL Assessment, statistical data is important and there has been significant work undertaken in terms of data collection and completion of documentation. There could inevitably be further data requested, however the Authority does not take such matters lightly. The Authority is conscious of the administrative burden put on firms to provide this data and is appreciative of the support from industry to date. The Authority carefully considers all additional data requests and strives to locate information it requires in plenty of time, but this is not always possible.
• The Authority wants to ensure it acts in an open and transparent manner. To that end, the Authority has increased outreach and events, and would encourage all stakeholders to attend or follow where they can. • Due to the potential high volume of attendees for outreach and events, some sessions may be repeated. Repeat events are noted in the event description.
• The pensions sector is strongly encouraged to engage directly with the assessment team if invited to do so, as this provides a valuable opportunity to explain sector-specific features and products.
• Constructive dialogue between the pension sector and MONEYVAL assessors will help to ensure a balanced understanding.

Other Matters: Economic Development

Q12 – What steps will you as regulators take to help industry to attract funds to the Isle of Man and ensure they stay long-term, contributing to a sustainable economic growth?

The Authority’s role as a proportionate and risk-based regulator is central to maintaining confidence in the Isle of Man’s financial services industry. By ensuring a robust yet flexible regulatory framework, the Authority aims to provide an environment that supports innovation and competitiveness, thereby supporting the Island’s economy and its development as an international financial centre.

The Authority is part of a wider network and collaborates with the Department for Enterprise and other government agencies, such as Finance IOM, to promote the Island as a secure and attractive jurisdiction for financial services. This coordinated approach aims to position the Isle of Man to capture opportunities and encourage long-term investment that contributes to sustainable economic growth.

Maintaining a robust regulatory environment is essential to the Isle of Man’s reputation as an excellent place to do business. It is in everyone’s interests to demonstrate the effectiveness of the measures the Island has in place to protect consumers and prevent financial crime. In particular, it is important to showcase how the Island fights financial crime in the Island’s next MONEYVAL evaluation in October 2026. Jersey and Guernsey have just recently completed their 5th round evaluations with sound results, providing them an opportunity to focus on growth. A successful outcome for the Isle of Man will enable the Authority to focus on additional initiatives for growth and innovation.

While the focus of all stakeholders is to work collaboratively to prepare for the upcoming 2026 MONEYVAL Mutual Evaluation, the Authority is currently pursuing a number of growth initiatives, such as collaboration on the Sustainable Finance Initiative with Finance IOM, and the Fintech Innovation Hub with Digital IOM and Finance IOM offering pathways for tech based and artificial intelligence solutions. In addition, the Authority has worked with industry to enhance the attractiveness of the Island’s captive insurance sector by simplifying solvency capital requirements and introducing a fast-track authorisations process to improve the speed to market. Lastly, the Authority also operates a regulatory sandbox, giving businesses the opportunity to test innovative financial products and services in a secure, controlled environment—helping them manage risk effectively while accelerating their route to market.

The proposed revisions to the regulatory framework for pension services provides a good opportunity to consider how the Authority can work with industry and the other Isle of Man Government agencies to support the promotion of the Isle of Man as a jurisdiction of choice for pension services.

Other Matters: Social Security Matters – Guaranteed Minimum Pension

Q13 – Is there any plan to align guaranteed minimum pension (‘GMP’) equalisation regulations with the UK? Will any guidance or requirements be put in place by the FSA?

The Treasury (social security) has applied to the Isle of Man some UK pensions legislation relating to the equalisation of guaranteed minimum pensions -see in particular, sections 24A to 24H as inserted into the Pension Schemes Act 1993 (as it applies to the Island) and Part 4 of the Occupational Pension Schemes (Schemes that were Contracted-out) (No.2) Regulations 2015.

Treasury has not issued guidance on the use of the GMP conversion legislation under section 24A(2) of the Pension Schemes Act 1993, as the DWP did in April 2019. Nor has Treasury applied the short Pension Schemes (Conversion Of Guaranteed Minimum Pensions) Act 2022 to the Island yet. The 2022 Act clarified that the legislation applies to survivors as well as earners; allowed the UK government to set out in regulations the conditions that must be met in relation to survivors’ benefits and set out in regulations detail about who must consent to the conversion; and removed a requirement for schemes to notify HMRC when they carried out a conversion exercise.

Treasury is monitoring legislative developments that has taken place in the UK relating to GMP equalisation and is considering whether (and if so, how) it should make similar provision for Isle of Man pension schemes.

If any related matters impact the regulatory framework for pension services, the Authority will consider (in conjunction with Treasury) associated regulatory requirements or guidance. However, the Authority would not introduce requirements or guidance in respect of social security legislation.

Other Matters: Changes to Minimum Wage

Q14 – What impact does the Authority foresee on licensed businesses resulting from the 2026 increase to minimum wage in the Isle of Man?

The Authority recognises changes to minimum wage can have operational and financial implications for businesses, including regulated entities. However, setting minimum wage levels is outside the Authority’s statutory remit. From a regulatory perspective, firms are encouraged to incorporate potential wage adjustments into their business planning and risk management processes.

SECTION B - Legal Questions

Simon Evans, CMS

Q1 - Do you believe qualitative information is becoming more important in regards to fiduciary duties?

If we are looking at more than risk-adjusted returns, then yes. One problem is if we conclude we have multiple aims (risk-adjusted returns, standard of living, something else) then it’s up to the Trustees to decide how they balance these - do you target a specific return first and then look at other factors? What standard of living factors should you target? Smaller schemes also have to judge how much they should spend going into the weeds of quantitative analysis.

Q2 - Can you comment on how the increasing institutional adoption of crypto assets might impact fiduciary duties?

In principle, crypto assets are just an asset class. So long as the scheme investment power allows, a Trustee can consider them.
Some argue that the high returns potentially available mean Trustees are missing out. However, Trustees have other considerations - such as volatility of the asset and secure custody. My view is that Trustees have to properly consider how they think it will provide a return - crypto hasn't behaved counter-cyclically like gold, and if it’s just a 'blind' investment in the hope its price goes up then its little different from betting on the horses. It’s for the investment adviser to explain how they think it will perform (and how that sits in the Trustees' diversified portfolio) with some solid data.

Q3 - What is the test to demonstrate member engagement?

The published opinion by Nigel Giffin KC says "a very high proportion of members would either positively support the reliance placed upon the non-financial factor in question, or at any rate have no objection to it". He did not think that authorities/Trustees need to be convinced no member would object to it, but clearly a bare majority on a controversial topic would not be enough.

In specific cases, there may be a good reason for Trustees to think members all have one view - for example the pension scheme for a cancer charity might assume nobody would want to invest in tobacco companies.

There are some schemes which use an app allowing members to vote on certain investments. However, almost all schemes struggle to get engagement - even the ones which think they have an interested membership find low rates of responses to surveys.

Q4 - Do you think there will be a legal liability on local government pension scheme Trustees that have lost money on fringe investments that were ideologically motivated rather than investing on financial factors?

In principle there is for Trustees (although local government pension schemes are a specialist area so may have some differences). Trustee duties are a legal obligation and legislation says that trustees cannot be exonerated for breach of their duty of care in relation to investments. In practice, proving this and proving a specific loss to the members is difficult. A lot of the published legal advice may in fact be driven by the local government schemes trying to resist being pushed into making ideologically motivated investments.

SECTION C - Income Tax Department Questions

Nicola Skillicorn and Steve Finan, Isle of Man Income Tax Division

Q1 - How many fines have you issued to date and what are the amounts including the highest?

As stated during the conference, tax information is confidential, so the results of any tax related enquiries will never be published. However, the Division has levied a number of penalties against Financial Institutions where failures have occurred. It is important to state that whilst the CRS and FATCA regulations allow for the imposition of penalty charges, it is rare that the full statutory amounts will be issued, as the regulations allow for those amounts to be reduced, taking into account factors such as cooperation, risk and proportionality.

Q2 - Some countries have pension schemes exempt under FATCA/CRS e.g. UK. Why can’t the IOM be exempt?

The CRS also provides for individual jurisdictions to legislate for jurisdiction specific NRFIs and excluded accounts. However, such legislation is subject to peer review by the OECD and in order to comply they must meet certain criteria including having substantially similar characteristics to the standard classes of NRFIs and excluded accounts. Discussions have previously been had with the APSP over legislating for the exclusion of certain IOM pension schemes, but the ITD concluded that the similar characteristics aspect would not be met.

Q3 - Do you think that FTCA/CRS etc. has actually led to additional tax revenue?

Yes, according to the OECD Global Forum's 2025 annual report, in 2024 32,000 requests for information were sent to support ongoing tax investigations and information on over 171 million financial accounts was automatically exchanged. Since 2009, at least 135 billion Euro of additional revenues (tax, penalties and interest) have been identified from exchanged data and enhanced tax transparency.

Q4 - Will MoneyVal be able to ask about level of compliance within this area and if there are a lot of breaches will this count against the Island’s assessment?

MONEYVAL may ask about CRS compliance given the strong links to KYC documentation held for AML/CFT purposes. However, there is a separate ongoing assessment of the Island's compliance with the CRS undertaken by the OECD’s Global Forum on Tax Transparency which is equally important to the Isle of Man's reputation.

Q5 - Identification of the correct type of FI can be very complicated. What support can ITD provide in order to ensure that an entity is reporting correctly? How would you approach a situation where the wrong FI classification has been used?

The AEOI compliance team is available to discuss any particular enquiries you may have and whilst the team and the Income Tax Division cannot provide an entity with specific advice as to what their classification is, we can assist in discussing the requirements within the CRS and FATCA and how that may apply in your circumstances.

With regard to a situation where the wrong FI classification has been used, I would encourage you to reach out to the AEOI team to discuss the situation. If the wrong classification has been used this will have led to either under or over reporting depending on the scenario. Therefore, it is important to rectify the situation as soon as possible to ensure the correct information is exchanged internationally.

Key Contacts:

Isle of Man Income Tax Department AEOI Team: aeoi.admin@itd.treasury.gov.im

Isle of Man FSA Policy & Risk Division: policy@iomfsa.im | +44 (0)1624 646000