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REVIEW SUMMARY

The Sovereign Group

Sovereign Group is a Gibraltar-based corporate services company established in 1987.

Over the years, they have grown into a large corporate and trust service provider that currently manages over 20,000 clients. This includes companies, entrepreneurs, private investors or high-net-worth individuals and their families. 

The Sovereign Group has around US$10 billion of assets under administration.

They can offer their services in Africa, Asia, Caribbean, Europe and the Middle East.

Overview
FAQ
Customer Reviews
Expert Verdict

The Sovereign Group is a market leader in the provision of pensions with a broad proposition that can be primarily divided into three categories:

  1. Corporate services
  2. Private clients
  3. Retirement planning

We will be looking into their retirement planning services specifically in this review.

Sovereign offers retirement planning products and solutions from Gibraltar, Guernsey, Hong Kong, Isle of Man, Malta and the UK.

Under international personal solutions, the Sovereign Group provides 4 main solutions:

1. SIPPs (Self-Invested Personal Pensions):

The Sovereign International SIPP is a pension product established under and governed by the MW SIPP 2 Trust Deed and Rules and registered with HMRC as a Registered Pension Scheme.

The Sovereign International SIPP is designed for non-UK tax residents who wish to plan for their retirement. You can learn more about it in the documents section of this review.

2. QROPS (A Qualifying Recognised Overseas Pension Scheme):

Sovereign offers a range of third country QROPS products from its administration offices in Gibraltar, Malta and IOM. These include:

  • Gibraltar QROPS – The Calpe Retirement Benefit Scheme:

    The Calpe Retirement Benefit Scheme was established in Gibraltar by Sovereign Trust International Limited and it is administered by Sovereign Pension Services (Gibraltar) Limited.

    You can learn more about the scheme in the FAQs section of this review.

  • Gibraltar QROPS Lite – The Calpe Lite Retirement Benefit Scheme:

    This scheme is similar to the one above, except it is meant for pensions that are less than £100,000. Investments can be placed with different, approved investment providers and they are available in major currencies.

    You can learn more about it's key features in the FAQs section of this review.

  • Malta Trust Based QROPS – The Centaurus Retirement Benefit Scheme:

    The Centaurus Retirement Benefit Scheme was established in Malta by Sovereign Pension Services Limited. Sovereign Pension Services Limited is registered by the Malta Financial Services Authority (MFSA) as a retirement scheme administrator in terms of the Retirement Pensions Act 2011 and is audited by KPMG.

  • Malta Trust Based QROPS Lite – The Centaurus Lite Retirement Benefit Scheme:

    This scheme is similar to the one above but specifically for pensions valued below £100,000. Retirement income may be drawn commencing anytime between ages 55 to 75.

  • Malta Contract Based QROPS – The Kemmuna Retirement Benefit Scheme:

    Kemmuna (the Scheme) is a retirement benefit scheme established by contract between the member and the Retirement Scheme Administrator (RSA), Sovereign Pension Services Limited.

    This scheme is mainly for residents and non-residents of Malta and it can be a suitable QROPS for EEA residents who intend to remain non-UK tax resident.

    The Scheme is licensed under the Retirement Pensions Act, 2011, by the Malta Financial Services Authority (MFSA).

  • Isle Of Man QROPS – The Aegean Retirement Benefit Scheme:

    The Aegean Personal Pension Plan is mainly meant for pensions with a value greater than £100,000. The retirement income for this scheme can be drawn commencing at age 55.

    Up to 30% of the value of a member’s pension fund may be withdrawn as a PCLS (Pension Commencement Lump Sum) at the time benefits are taken. There is no Isle of Man withholding tax on payment of PCLS. Isle of Man income tax of 20% is applied to all retirement income paid.

  • Isle Of Man QROPS Lite – The Aegean Lite Retirement Benefit Scheme:

    The Aegean Lite Personal Pension Plan is similar to the one above except that it is best suited to those with pensions with a value less than £100,000.

3. QNUPS (A Qualifying Non-UK Pension Scheme):

It is essentially a pension scheme based outside the UK that qualifies for an exemption from UK Inheritance Tax (IHT). Sovereign offers a range of QNUPS products from its administration offices in Guernsey, Malta and Isle of Man. These include:

  • The Brock Personal Pension Plan (Guernsey):

    Sovereign has developed a multi-member QNUPS – the Brock Personal Pension Plan – that is approved by the States of Guernsey Income Tax Office and also satisfies the necessary conditions to be regarded as a QNUPS for UK purposes.

    The Plan starts at £600 to establish and has annual administration fees from £750. It has 3 entry levels known as builder, classic and pro.

  • Rinella Retirement Benefit Scheme (Malta):

    The Rinella Retirement Benefit Scheme is licensed in Malta and qualifies as a Qualifying Non-UK Pension Scheme (QNUPS), given that it satisfies UK Inheritance Tax requirements. It is applicable to residents and non-residents of Malta. 

    The pension can be used by the member for their lifetime and any remaining balance can be passed on to their heirs upon death without deduction of tax at source in Malta.

  • The Pacifica Personal Pension Plan Plan (Isle of Man):

    The Isle of Man specialises in all aspects of international pension planning, from large multinationals to individual clients.

    The pension scheme administrators are regulated by the Isle of Man Financial Services Authority (FSA) and are subject to a rigorous approval process and on-going regulatory audit.

4. IRPS (International Retirement Plans):

Sovereign offers a number of International Retirement Plans (IRPs) from its administration office in Guernsey. These are retirement planning solutions suitable for the internationally mobile and offer a number of product options to cater to differing pricing and investment requirements.

  • Conservo International Retirement Plan (Guernsey):

    Sovereign has developed a multi-member retirement annuity trust scheme specifically for individual’s resident outside of the Bailiwick of Guernsey.

    The Conservo International Retirement Plan qualifies for an exemption from Guernsey income tax. It is essentially a low cost highly efficient vehicle for savings and retirement.

    It enables the accumulation of wealth to fit a variety of financial circumstances. There is no need for a regular fixed monthly commitment as assets can be added at any time. Potentially free from income or capital gains tax, retirement fund growth will be good from the outset.

Other international corporate solutions offered by The Sovereign Group include:

  • International Pension Plans (IPPs)
  • International Savings Plans (ISPs)
  • End of Service Gratuity Schemes (EOSGS)

Local pension solutions are also offered by The Sovereign Group, these include:

  • UK SIPPS
  • Guernsey Retirement Annuity Trust Scheme (RATS)
  • Isle of Man SIPPS
  • UK Small Self-Administered Scheme (UK SSAS)
  • Guernsey Occupationals
  • Isle of Man Occupationals
  • Hong Kong ORSOs

We would highly recommend reading the expert verdict section of this review.

 

 

The Pros

> A well established brand in the international pensions market
> Offers QROPS, SIPPs and International Pension Plans in UK, Malta, Gibraltar, Isle of Man and Guernsey
> As larger providers in the marketplace, they are able to offer a broad selection of options that some of the smaller firms are unable to match
> Free transfers to any other Sovereign QROPS or SIPP product, should client circumstances change

The Cons

> Costs are largely dictated by the charging structure chosen by an adviser
> QROPS is a complex area and requires full financial advice
> No flexibility of full withdrawal or full access in the early years without penalty (exit penalties within the first few years of establishment, depending on the scheme)
Which QROPS jurisdictions does Sovereign offer?

Sovereign offers QROPS from Isle of Man, Malta and Gibraltar.

Once the QROPS is established, it is possible to transfer seamlessly within the Sovereign QROPS range without charge.

What are the key features of the Calpe Retirement Benefit Scheme?

The key features of the scheme, as stated by The Sovereign Group are:

  • Retirement income may be drawn commencing at age 55
  • Up to 30% of the value of a member’s pension fund may be withdrawn as a PCLS (Pension Commencement Lump Sum) at the time benefits are taken
  • There is no Gibraltar withholding tax on payment of PCLS
  • Gibraltar withholding tax of 2.5% is applied to all retirement income paid
  • The pension fund can be used by the member for their lifetime and any remaining balance can be passed on
    to their heirs upon the member’s death without any deduction of tax at source in Gibraltar
  • Investments can be invested and paid in any major currency.
What are the features of the Calpe Lite Retirement Benefit Scheme?

The key features of the scheme, as stated by The Sovereign Group are:

  • This scheme is meant for pensions less than £100,000
  • Retirement income may be drawn commencing at age 55
  • Up to 30% of the value of a member’s pension fund maybe withdrawn as a PCLS at the time benefits are taken
  • There is no Gibraltar withholding tax on payment of PCLS
  • Gibraltar withholding tax of 2.5% is applied to all retirement income paid
  • The pension fund can be used by the member for their lifetime and any remaining balance can be passed on
    to their heirs upon the member’s death without any deduction of tax at source in Gibraltar
  • Investments can be invested and paid in any major currency
  • Investments placed with a range of approved investment providers.
What is the Centaurus Retirement Benefit Scheme?

The Centaurus Retirement Benefit Scheme was established in Malta by Sovereign Pension Services Limited. Under this scheme:

  • Retirement income may be drawn commencing anytime between ages 55 to 75
  • Up to 25% of the value of a member’s pension fund may be withdrawn as a PCLS at the time benefits are taken
  • There is no Maltese withholding tax on payment of PCLS
  • Under certain tax treaties tax, if any, will only be payable on retirement income in the country of the member’s
    residence.
  • Members should seek independent financial advice about the effect of any applicable tax treaty.
  • The pension fund can be used by the member for his lifetime and any remaining balance can be passed on to
    their heirs upon the member’s death without any deduction of tax at source in Malta.
  • Investments can be invested and paid in any major currency.

 

Which QNUPS jurisdictions does Sovereign offer?

Sovereign offers QNUPS from Guernsey and Malta.

 
What does Sovereign essentially offer under international corporate IPPS?

IPPS stands for International Pension Plans.

Sovereign offers a number of solutions for international employers who may have employees operating outside their home jurisdiction (expatriates), who frequently move between countries, and who may operate in territories where there may be no locally recognised pensions framework.

Sovereign’s solutions are offered from Guernsey and the Isle of Man.

Pension schemes may be totally bespoke to the employer or offered as part of a multi-employer master scheme with an individual segregated employer’s plan within the master scheme.

Sovereign will work with the employer to design, deliver and then administer the international corporate plan.

Recognised for tax purposes in Guernsey and the Isle of Man respectively, payments from the schemes will be paid gross of tax.

There are no limits on contributions to the schemes and a number of options available on termination of employment and at retirement.

What is EOSGS offered by the Sovereign Group?

EOSGS stands for End of Service Gratuity Schemes.

The Sovereign Group can assist corporate clients in the Middle East with specialist reward, incentive and retention solutions, including both international pension plans (IPPs), international savings plans (ISPs) and end of service gratuity (EOSG) arrangements.

Sovereign provides its corporate clients with access to a tiered EOSG scheme that aims to deliver a tailored solution specific to an employer’s needs and to suit a range of budgets.

  BRONZE
Off-balance sheet funds to cover future EOSG liabilities Y
Off-balance sheet funds to cover past EOSG liabilities Y
Option for Employee savings X
Option for Employer savings to match employee contributions X
Option for Employer to offer Shares X
Establishment Costs USD $7,500
Ongoing Annual Costs $5,000

 

  SILVER
Off-balance sheet funds to cover future EOSG liabilities Y
Off-balance sheet funds to cover past EOSG liabilities Y
Option for Employee savings Y
Option for Employer savings to match employee contributions X
Option for Employer to offer Shares X
Establishment Costs USD $10,000
Ongoing Annual Costs $7,500

 

  GOLD
Off-balance sheet funds to cover future EOSG liabilities Y
Off-balance sheet funds to cover past EOSG liabilities Y
Option for Employee savings Y
Option for Employer savings to match employee contributions Y
Option for Employer to offer Shares Y
Establishment Costs USD $12,500
Ongoing Annual Costs $10,000

 

Sovereign engages a leading Guernsey Law firm, with extensive experience in the UAE and specifically in respect of end of service gratuities, to undertake the preparation of the relevant legal documents and agreements for the EOSG plan.

Sovereign then provides ongoing trust and administration services.

What are ISPs?

ISPS stands for International Savings Plans.

International Savings Plans (sometimes referred to as gratuity schemes) are single centralised savings arrangements setup and managed from a jurisdiction such as Guernsey or the Isle of Man.

ISPs are typically utilised by multinational employers who wish to provide relevant employees with a savings plan as part of their overall benefits package. Relevant employees can include highly transient employees who move between countries or longer term expatriate employees operating outside of their home country.

ISPs are also utilised by employers who have populations of employees located in countries where there is no recognised pension framework, including developing countries and emerging markets.

Would definitely recommend them

My family and I use Sovereign's QROPS and QNUPS arrangements.

While we employ the services of a chartered financial planner to advice us, I have to say Sovereign Group excels in terms of customer service, attention to detail and levels of professionalism.

Expert assessment of the Sovereign Group

Our verdict is that Sovereign is able to offer an all-round solution covering the needs of most clients.

However, it is likely that many existing clients will have received poor investment outcomes given the popularity of Sovereign amongst non-UK advisers.

This will be indicated by investments that underperform their benchmarks, asset allocations which are too risky and may contain structured products or UCIS funds, unnecessary lock-in periods, and opaque charging structures on both the platform and underlying investments.

When added to Sovereign pension trustee fees - the reduction in investment returns can be severe.

Read the UK regulators advice on pension transfers.

Never deal with a firm that isn’t authorised as a UK pension transfer specialist.

Our advice would be to seek professional, fee-based and independent advice if you have an existing QROPS or other solution with Sovereign Pension Trustees.

For pensions worth £250,000 or more, we recommend contacting us for a Second Opinion.

The Sovereign Group - International Pensions Brochure

The Sovereign Group - Sovereign Pensions and Retirement Planning

The Sovereign Group - QROPS Brochure

The Sovereign Group - International SIPP Brochure

The Sovereign Group - Small Self-Administered Scheme

The Sovereign Group - International SIPP Key Features

The Sovereign Group - International SIPP Terms and Conditions

The Sovereign Group - International SIPP Fee Schedule

The Sovereign Group - Calpe Retirement Benefit Scheme Information Sheet

The Sovereign Group - Calpe Retirement Benefit Scheme Fee Schedule

The Sovereign Group - Calpe Lite Retirement Benefit Scheme Key Features

The Sovereign Group - Calpe Lite Retirement Benefit Scheme Fee Schedule

The Sovereign Group - Centaurus Retirement Benefit Scheme Information Sheet

The Sovereign Group - Centaurus Retirement Benefit Scheme Fee Schedule

The Sovereign Group - Kemmuna Retirement Benefit Scheme Information Sheet

The Sovereign Group - Kemmuna Retirement Benefit Brochure

The Sovereign Group - Aegean Retirement Benefit Scheme Information Sheet

The Sovereign Group - Aegean Retirement Benefit Scheme Fee Schedule

The Sovereign Group - Brock Personal Pension Plan Flyer

The Sovereign Group - Rinella Retirement Benefit Scheme Information Sheet

The Sovereign Group - Conservo International Retirement Plan Information Sheet

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