July 23, 2024 • 27 mins
In this episode, we are joined by James Quarmby and Emily Osborne of Stephenson Harwood. The pair discuss developments in the world of corporate pensions, Guernsey's offerings as a domicile, and the upcoming joint Guernsey Finance and Stephenson Harwood pensions seminar in London this September.
Check more out about the Seminar here
Follow James on LinkedIn
Follow Emily on LinkedIn
Follow Stephenson Harwood on LinkedIn
Follow Guernsey Finance on LinkedIn
Follow Guernsey Finance on Instagram
Follow Guernsey Finance on Threads: @guernseyfinance
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Brandon (00:00):
Hello, and welcome to the Guernsey Finance podcast,
where we bring you interviewswith leaders from the global
finance industry, as well asnews and developments from
Guernsey's financial servicessector. My name is Brandon
Ashplant, and I am head oftechnical here at Guernsey
Finance. For those of you whoaren't familiar with Guernsey,
the island is a leading globalfinance centre. The success of
(00:22):
the industry here is underpinnedby economic substance, political
stability, and asset security,and we are committed to the
cause of sustainable finance. Tofind out more about Guernsey's
success in sustainable finance,tune into our sister podcast,
the Sustainable Finance Guernseypodcast.
Today, I am delighted to bejoined by James Quarmby and
(00:42):
Emily Osborne of StephensonHarwood. On the episode, we'll
be discussing developments inthe world of pensions. Guernsey
is a domicile and its offeringand the impact of the global
elections. So without furtherado, welcome to you both.
James (00:57):
Thank you, Brandon.
Emily (00:58):
Thank you.
Brandon (01:00):
So firstly, obviously, you know, many of our listeners
hopefully know, you know, whoyou are and obviously a bit
about Stephenson Harwood and,follow you, on on LinkedIn and
various other sort of platforms.But, you know, just for those
who don't know, just introduceyourselves to our listeners, and
just tell us a bit about yourbackground and, of course, how
you ended up at Stevenson artStevenson Harwood.
James (01:21):
I'm James Quarmby, and I'm the founder of the private,
wealth team at StephensonHarwood, which is we now have, I
think, 55 lawyers across, 6 or 7jurisdictions. I've actually
lost count. It doesn't reallymatter. Emily and I have worked
together for a long time, and,one of our specialties has been,
(01:42):
pensions, law, and tax,particularly, non UK pensions,
and that's still what we do tothis day. Emily, what about you?
Emily (01:50):
Well, I'm Emily Osborne. I have been at Stevenson and
Harvard for nearly 10 years now,but I have worked with James
since 2008.
James (01:58):
Bloody hell.
Emily (01:59):
I know.
James (01:59):
Long service medal in the post.
Emily (02:01):
Hope so.
Brandon (02:03):
Brilliant. So let's kick off. Emily, if we could
just start with you, what sortof trends are you seeing in the
sort of, the the corporatepension market, if you like?
Emily (02:15):
So, obviously, pensions continue to be an important way
of incentivizing employees. Wesee particularly, well, I
suppose globally, I do a lot ofwork in the Middle East, and
they're although they call themend of service gratuity, so
they're not quite pensions, butthe idea of making some sort
provision for your employeespost service is definitely an
(02:38):
idea that is passing aroundwell, it is traveling globally,
and continues to be important tofind somewhere to have that sort
of offering for your employees.That doesn't mean that you're
doing it in lots of differentjurisdictions with different
rules and having to coordinatelots of different things. So I
(03:00):
think a continued importance ofpension. I mean, everyone's
getting older, so pensionscontinue to be a very important
part of everybody's financialplanning.
Brandon (03:10):
And, James, would you agree with that?
James (03:12):
Yeah. I think the interesting when when you look
at pensions market, you need tounderstand that that really the
the pioneers of pensions will bethose in, common law
jurisdictions, that are used totrusts. So when we're looking at
and, of course, we're used tothose in the States and then the
the UK. Over in Europe, they'remore contractual in nature. And
(03:36):
then when you move outside ofthat into Middle East and Africa
and so on, you you don't reallyget that separation between
what's promised by the employerand what's actually provided
after, you leave.
So if your employer goes bust,then your pension goes down the
toilet, basically. And that'sthe point of having funded
(03:57):
pensions. And and I think what'sgot interesting about the
international pensions market isthis idea that let's say you're
an employer in the Middle East,North Africa, whatever, that you
would fund a pension locally,but the custodian of that
(04:18):
pension will be outside of thejurisdiction, somewhere safer,
somewhere that does actuallyrecognize trust, for instance.
So it it's that intermediationfrom an asset protection point
of view legally, and and justreputationally as well.
Brandon (04:36):
Yeah. Definitely. And and sort of, I guess that sort
of transitions very well intothis sense of, you know, a
rising globalized world orperhaps it's been on on the on
the, you know, on the back footas of late, politically
speaking. But, generally, wespeak in speak in terms of being
in a globalized world and,increasingly, businesses operate
(04:57):
across border and so forth. And,inevitably, that means sort of,
you know, corporates employ aworkforce that's based in
various different geographicallocations, countries,
territories, that sort of thing.
How has that really impacted theneed for international pensions,
you know, at a global level, Isuppose?
Emily (05:14):
So I think there's sort of 2 parts to that. 1 is that
the employer is used toproviding pensions generally. So
they they do it for maybe in theUK or the US, and so they expect
to provide most of them providethe same benefits throughout the
world. So you start havingpeople in different
jurisdictions, you startintroducing them to pensions.
(05:35):
And then the second part of thatis that you only want you do
want an international pensionfor all of your workforce.
You don't want a pension inevery country that you have
employees because that would bea bit of a headache to
administer. And then I think theother side of it is that you
also end up having employees whoare perhaps used to having
pensions, who are working injurisdictions you don you don't
(06:04):
want a local scheme. So,ideally, you set up something
that works for everybody. Imean, it's probably not it's
quite tricky to work foreveryone, but that's the the
goal is to try and findsomething that works for
everyone. And then it is a agenuine international scheme
that you only have to have one,which perhaps a few tweaks to
make it work in the variousplaces.
Brandon (06:23):
Yeah. And and and I have to ask, of of course, how
are international financialcenters like Guernsey, suited to
meet the needs of the currentsort of market in the context
we're talking?
James (06:37):
That sounds like a leading question, Brandon.
Brandon (06:40):
So
James (06:43):
So I I think they're perfect. That's probably the
answer. Just stop. Yeah. I'm notsaying just stop there.
Completely perfect. I I think itgoes back to the point Emily was
making a minute ago. If you'rean international employer with
employees in 26 differentcountries, you really don't have
the time or energy to set up 26different pension schemes. And
(07:08):
your employees, as they movebetween different countries,
also do not want to collect 6 or7 different pensions, based on
their service in, you know,jurisdiction a, b, c, d, and e.
It is an absolute pain foreveryone.
And there's also this thingcalled political risk, which is
extremely important these days.Yes. It might be fantastic to
(07:33):
work and earn highly in a MiddleEastern country. I'm not gonna
name any, but just choose arandom one. And if there's a big
political risk and your schemeis located there and that
jurisdiction decides to abolishpensions or snaffle all the
assets, so you've you've got nocome back at all.
(07:55):
You're going to feel a lot saferif the pension pot that you
worked so hard to accrue is in ajurisdiction with a proven track
record of respect for law. Andrules, and is highly regulated.
And no one's gonna run away withyour money. Or if you're the
government, confiscate it.
Emily (08:13):
Something like Guernsey, perhaps.
James (08:14):
Well, I hear Guernsey is okay. Yes. As I said earlier,
it's probably perfect. I mean,as it happens, Guernsey is
extremely experienced in thepencils market. And and when
curaps were a big thing in itsheight, I mean, there must have
been there were, like, tens ofthousands of curaps a month
(08:36):
being created.
And and 2 thirds of thatbusiness was going to Guernsey.
There's a reason for that. Andand that's because there's the
infrastructure of serviceproviders, to to set up and run
those pensions. So to answeryour question, I I think
(08:56):
Guernsey has set itself up quiteefficiently as a preeminent,
location for, internationalpensions.
Emily (09:08):
You mentioned that? Yeah. Sorry. Yes. Sorry.
I don't think they've gotobviously, there's good pen
there's good law, so you canhave all your different types of
pensions. You've got quite a lotof certainty. There are people
who are experienced in runningpensions. And I mean, just to
sort of go back on theinternational thing, the reason
that curaps were very popularwas that it just reflects the
(09:29):
reality that people don't stayin one country all their life
anymore. So the reason peoplewere transferring is that they
left the UK.
They were somewhere else. Theysometimes didn't want the
sterling risk anymore becauseYeah. Currency fluctuation's not
ideal when you think that yourpot's worth x and then you find
it's not and it's just becauseof the currency. Having
somewhere like Guernsey to parkthe money safely was a Mhmm. A
(09:51):
really good option for it's lessso for Qurops now, but the the
point stands for internationalpensions that you can have you
don't want to be exposed tosterling necessarily.
Brandon (10:01):
Yep. Yeah. No. Definitely. And I was just gonna
mention there pick up on yourpoint, James, there about, you
mentioned the regulatoryenvironment.
How is Guernsey's pensionlegislation and and and regs
different from otherjurisdictions? And and in
addition to that, what role doesthe Channel Islands Financial
Services Ombudsman play in inthat within that sort of wider
(10:23):
picture?
James (10:25):
I think one of the most important things is having the
legislation in the first place.And and I think Guernsey was the
leader in having the right kindof legislation to enable us to
run a pensions there without,without any problems. Now there
there are other islands who'vebeen much slower in adopting the
(10:49):
kind of legislation that'sneeded to, to to run a pension.
And on the regulatory front, oneof the things that happened on
the CURAX side when the therevenue over here has been
trying to, restrict their usagewas to impose a requirement that
there's a pensions regulator.And, Emily, you've done a lot
(11:12):
more work on on that side, andthat was quite an important
move, wasn't it?
Emily (11:15):
Yes. And and Guernsey responded to that and has
regulation of pensions now,which, I mean, whilst regulation
can be somewhat hard work tocomply with, it does in the end
drive service levels and customwell, client security, really,
isn't it? That that you knowyour money is safe? So I think
(11:36):
it is a factor when you'relooking at where you might put
your pension scheme, especiallyif you are an international
employer. You need to justify toall your employees why you've
selected somewhere.
A a a jurisdiction that has astrong regulator, that has a
financial services ombudsman, soyou can take your complaints if
you're not happy with what'shappening, especially because
that's what we would be used todoing in the UK. It's an
(11:58):
important part of the factorsthat make you choose to use
Guernsey.
James (12:02):
I think it was one of those rare cases where it was a
regulation we were actuallyhappy with because we needed we
needed Guernsey to say itspensions business is regulated.
Otherwise, we couldn't qualifyas a cure Securinapse. Normally
normally, regulations, when theycome in, we grit our teeth and
say, okay. That's another onewe're gonna have to put up with.
(12:23):
In that particular case, it wasactually something it's a rare
rare case of where we said
Emily (12:28):
It's very rare
James (12:29):
case where James welcomes regulation. I never welcome
regulation listeners, but I'mset in that case.
Emily (12:36):
So well done, Guernsey.
James (12:37):
Yeah. We've
Emily (12:38):
got James to like regulation.
James (12:39):
Hats off. I thought we'd never
Brandon (12:41):
be go. One more question on Guernsey before we
sort of move on to to some othersort of topics. You mentioned
earlier on, sort of, in theconversation that, Guernsey does
have a long standing pensionsindustry. When you speak to the
decision makers, or the moversand the shakers, to what extent
(13:01):
is this sense of longevity of anindustry within a particular
domicile a deciding factor whenchoosing to select a a domicile?
Emily (13:11):
I think it's really important because whilst we like
to imagine that nothing willever go wrong, if something does
go wrong, you want to besomewhere where you know that
the courts and the lawyers andthe system knows what a pension
is, and you know what theanswer's going to be because
they've got a history of dealingwith it. You know that the
people managing your pensionknow what a pension is, know how
(13:33):
to run it, have been doing itfor a long time. But I think it
is really important when you'reI mean, new things are cool.
Right? But you don't necessarilywant to be at the forefront of
risking your pension.
James (13:45):
I I'd agree with that. I I I think clients will rely on
their lawyers to tell them thekind of pension they need and
where it should be. And I don'tlike my clients to be guinea
pigs for new jurisdictions andnew products. I don't enjoy that
ride at all. I think if you ifif you want excitement, there
(14:05):
are other ways of finding it,but not not with your pension.
I think we all accept that apension is there, as as a safety
net for you.
Emily (14:12):
Yeah. I mean, it's a security blanket, isn't it? So
you want to know that it worksYeah. And that it's safe. So
it's important that that you canshow that there's a track record
of dealing with things in acertain way.
James (14:25):
So Guernsey should carry on doing what it's doing.
Brandon (14:28):
Brilliant. There we go. Talking less directly to to to
Guernsey, are there any othersort of considerations that
really come in to the mix, whendeciding on a jurisdiction? And
how important are thejurisdiction structures in this
decision making? Because,obviously, we've talked about
(14:50):
the sort of the importance of,you know, strong and stableness,
if you like, and sort of and theimportance of political and
economic stability and importantand stable, but well respected
and flexible regulation and allthese sort of points that come
up in a time and again.
But, yeah, really on the on onthe on the structure side,
what's the where does it sortof, tilt the table for you?
James (15:13):
Selfishly, I like the jurisdictions to be within 1
hour, plane journey of Gatwick.So, but no. Seriously.
Emily (15:26):
Well, so I was gonna say before you got got flight time
into why you might choose ajurisdiction
James (15:31):
That's important.
Emily (15:33):
That in terms of structures, I think Guernsey I
know this wasn't directly aGuernsey, but the thing Guernsey
had to talk about was that youcan have a contract based
scheme. Yeah. Because,obviously, we're all common law
lawyers. We love trusts. We knowwhat trusts are.
They are perfect for pensions.But in some jurisdictions,
particularly in Europe, they arenot perfect because they don't
(15:54):
know what they are and they endup being taxed really badly. And
it's better if you can arrangesomething in a contract form to
bring yourself within the, rulesthat they know what it is and
how it gets taxed. And,certainly, when I've worked with
various providers in Guernsey,they've been quite, you might
say, innovative, or certainlyflexible in creating products
(16:16):
and structures that work fordifferent jurisdictions. So you
might have a contract basedscheme and it uses a ICC or a
PCC or something like that.
So there's definitely I thinkhaving a range of structures,
particularly because we'retalking about international
pensions and internationalpeople, you can't just have one
thing and expect it to work foreveryone because the world is
(16:37):
different in different places.
James (16:39):
Yeah. And come I think it goes back to a point we made
earlier about having the rightkind of law. Mhmm. So, you know,
trusts have typically beenpensions for we, Commonwealth
people. But some jurisdictionsdo not recognize pensions, and
that already creates a problem.
And then if you go for acontract based scheme that's
(17:00):
quite small, people then worryabout cross contamination of
risk because a contract is not atrust. And then you've actually
got legislation that's on thebooks in Guernsey already
because PCC's protected cellcompanies were created for the
insurance business in in in inGuernsey. And I think ICC's
(17:20):
similarly, but I think it justshows you that that there's a
there's a menu of, optionsavailable that Guernsey has been
quite innovative in creating.And, actually, the PCC
legislation, which I thinkstarted in Guernsey, has been
copied by quite many
Emily (17:36):
In other places.
James (17:37):
It
Brandon (17:37):
started here in 90 7, the 97, I think, it launched.
Emily (17:41):
Well done.
James (17:42):
There you go. Now you done done your homework. I
didn't know that.
Emily (17:45):
You do now? Yeah. My daughter tells me you should
learn something new every day,so that can be your lesson
today.
James (17:50):
There you go. 97 PCCs.
Brandon (17:54):
Yeah. So you mentioned, well, I guess that sort of is
the answer to the next question,isn't it? What structures in
particular tend to influencethese decisions? I guess PCCICC
is a protected cell company,incorporated cell company are,
of particular interest. Is thereany is there any others sort of
again, or
Emily (18:14):
But no. I mean, I think that's having that with a
combination of a contract basedscheme or having a trust based
scheme for
Brandon (18:21):
Yep.
Emily (18:21):
Other, things. But, really, it's about having
flexibility and and adapting thesolution to the problem. So any
there are any other structures
James (18:30):
Well, I mean, there's there's only so many options you
need for pensions. It's eithertrust based or contract based.
Yeah. And the rest is just alittle bit of noise, really. I
mean, that's that's that's allyou need.
But we mustn't forget that a lotof jurisdictions cannot offer
that. Or even if they do, thethe local professionals are not
(18:54):
really on top of it. And that'sthe other point. There there are
a number of examples in theinternational finance world
where jurisdictions haveintroduced quite interesting
legislation to attract businessin. But, unfortunately, the
professionals in thosejurisdictions, don't really know
how it works.
(19:15):
And so you got you got to havethe legislation itself and the
professionals who know how itworks. And and running a pension
is different to running a familytrust.
Emily (19:25):
I was also gonna add that it's not only the professionals,
but also, for example, inGuernsey, the Guernsey tax
office because I guess it's thebenefits being a small island,
right, that you can go and askthe Guernsey tax office how a
particular pension payment outto somebody will be treated,
whether you whether they'veretired. I mean, talking there
are certain professions,obviously, that Guernsey the
(19:46):
Guernsey tax office accepts thatpeople in those professions
luckily get to retire pre 50 5.But you can just go and have a
discussion with them. So you'vegot the regulator and the tax
office, and they're actuallythey're doing their job, but
they're also very accessible, soyou can find out the answer. I
mean, you can't get an answerfrom HMRC.
I mean, they don't even answerthe phone, I think, according to
the press. So
James (20:05):
Well, they were they were gonna shut down the helpline for
4 months a year.
Emily (20:09):
Yeah. Oh, no. So I think that's another so it's part of
that adding to the professionalsand and everyone else in the
island is having the regulatorsbeing approachable.
James (20:19):
Town's office And knowledgeable. Yeah. I'm I'm
quite tired of getting advice inother countries, and I I hear,
well, the tax authority doesn'tknow how to treat that trust,
that product, that whatever.That's incredibly irritating.
What you want is a certainanswer.
And that kind of ruling whereyou can just ring up the
(20:41):
Guernsey Revenue Service and askthem, it gives a lot of comfort
to clients.
Brandon (20:48):
In recent years, we've seen, pensions increasingly
being used as part of sort ofsuccession planning. Emily,
what's driving this?
Emily (20:58):
Well, I mean, partly, I think it's, everyone's getting
older. You need to make someprovision for retirement.
Partly, it's because they havebeen an efficient way of
structuring things. I've had afew you know, you kinda get
those entrepreneurial clientsthat have not their business is
their pension and then they selltheir business and they're
(21:18):
probably gonna do something elsebecause entrepreneurs are
incapable of not startinganother business with their next
great idea. They're irritatinglysuccessful sometimes, or I'm
just jealous.
But they also there's a I havehad a few of those where, like,
I need to lock some money up.Eventually, I'm going to retire.
I do need to have some money.Let's put some money aside. And
(21:40):
I don't you can't just put it inan account somewhere.
I want it in a pension so that Iknow that I can't spend it
beforehand and it will be thereand the people that will run it
will do it properly. So I thinkthere's a sort of a part of
succession is making for yourown succession, not necessarily
for the next generation. And Isuppose in a certain way also,
(22:00):
there is more limited optionsnow in what else you might do.
So you people have looked at atpensions, and and certainly in
the UK, your ability to putmoney into a a registered
pension scheme is severelylimited, so which is sort of
crazy because we're all gonnalive longer and everything's
expensive, and we're going toneed to fund stuff later. So you
(22:21):
do need to make provision foryour retirement.
So I think all of those factorshave made pensions, more I was
gonna say exciting, but
James (22:33):
I don't think pensions are ever exciting.
Emily (22:34):
Why I hesitated.
James (22:35):
Over breaking that pudding.
Emily (22:38):
More, Interesting.
James (22:40):
Yeah. Anyway, move on.
Brandon (22:42):
There we go. Move on.
Emily (22:43):
So we're gonna talk widely adopted, maybe.
Brandon (22:45):
Well, there you go. Yeah. We're gonna talk about
something that's slightly maybemore interesting now. Obviously,
the hot topic on everyone's lipsis the general election. The
Labour Party, in the UK hasannounced that it will not seek
to reintroduce a lifetimeallowance on pensions.
What do you think, theimplications of such a policy
will be on the industry, bothdomestically in the UK, but also
(23:07):
sort of, you know, with aninternational outlook as well?
James (23:10):
Well, it's obviously good news that labor's not gonna
reintroduce the lifetimeallowance. That's not because
they're particularly generous topension savers. I think they're
actually worried about theimpact on consultants in the NHS
and other people, on, that kindof, employer funded pension. So
(23:37):
but that's good news for othersavers, anyway, that the
lifetime allowance, is a pain.
Emily (23:45):
But, I mean, it would be really good as I understand it.
The I don't think they're quiteat that level now, but until
recently, the revenue have beenissuing almost guidance almost
weekly on how the removal of thelifetime allowance and the
replacement thing will work, andit doesn't seem to still be
quite right. So, hopefully,we'll get some clarity on that
(24:05):
now that Labour said they won'treintroduce it. They could
perhaps fix the mess that's beencreated from having removed it.
Because I mean, I'm not joking.
Some in some circumstances, thecurrent official guidance is
just don't draw down. It's notreally a solution. I mean, I
want my pension. I've got to Iobviously, I'm not 55. I know
it's a podcast, so people can'tsee that, but I'm not.
James (24:26):
She's not. The, I can vouch.
Emily (24:29):
Thank you, James. But you don't wanna be told that you
can't take it because even thepeople that create the rules
don't know how what theinterpretation of it, which kind
of goes back to our earlierpoints about Guernsey and
certainty. And, I mean, and allof those things that you want
from your pension, we don'tcurrently have. Yeah. So labor
could definitely just make thata little bit clearer.
(24:50):
What else that I mean, this kindof an IHT possible risk in
relation to labor and pensions,do you think, James?
James (24:54):
I I think I think labor's got its eye on IHT and how it
can squeeze a bit more out. Ithink it's gonna be influenced
by some of the utterances fromthe IFS on the topic of pensions
and IHT. So I think I thinkthere will be, I think there
(25:15):
will be some a couple ofchallenges, but I don't I don't
think, that it's going to be abig deal because, ultimately,
Labour does not want to scarethe horses. They want to
proceed, cautiously andcarefully, and that's certainly
the, message that I've receivedfrom some of my contacts. So I
(25:37):
don't think we should be in thebusiness of scaremongering.
I think it would be a good thingif, the pension's legislation
was rationalized and we all knewwhere we were. That's the least
we can ask from our politicians.
Emily (25:47):
We want for for pensions as we've been talking about.
James (25:50):
We don't wanna end the podcast on that, though. That's
fine. I think Brandon's god tofire things up a little bit.
Brandon (25:58):
So finally, you are both speaking at, a joint
Stephenson Harwood and andGuernsey Finance pension seminar
at 12 Hay Hill in London. Whatcan people hope to learn by
attending the event? Why shouldpeople come along?
James (26:12):
Who are
Emily (26:12):
we gonna learn? Well, I think we've got quite an,
interesting array of of, topicsbeing covered, including, like,
the you can learn more aboutwhat all the random acronyms,
some of which we've been usingtoday Yeah. Mean in the pensions
world, a discussion about what'shappening in Guernsey, the
changes in Guernsey in thepensions world. Right.
James (26:30):
It's going
Emily (26:30):
to be bit of a global what's happening in Yeah. Other
places like Dubai and MiddleEast.
Brandon (26:36):
Brilliant. Well, thank you very much both for your,
your time today and for joiningus on the podcast.
James (26:41):
Thank you, Brandon.
Emily (26:42):
Thank you.
James (26:43):
It was really great to talk through
Brandon (26:44):
the changes taking place across the pensions
landscape, trends seen acrossthe globe, and what we might be
in store for the future. Thanksalso to you for listening. If
you enjoyed this thisdiscussion, we have a backlog of
interviews on the GuernseyFinance podcast channel. You can
check them out by searching forGuernsey Finance on your
preferred podcast platform. Wealso have links to James and
(27:05):
Emily and, as as, of course, aswell, Stevenson Harwood in our
show notes.
So check them out to hear morefrom them. To find out more
about Guernsey and itsspecialist financial services
industry, head over to ourwebsite, guernseyfinance.com. We
look forward to welcoming youback to the podcast soon, but
until then, it's goodbye fromGuernsey.
Hello, and welcome to the Guernsey Finance podcast,
where we bring you interviewswith leaders from the global
finance industry, as well asnews and developments from
Guernsey's financial servicessector. My name is Brandon
Ashplant, and I am head oftechnical here at Guernsey
Finance. For those of you whoaren't familiar with Guernsey,
the island is a leading globalfinance centre. The success of
(00:22):
the industry here is underpinnedby economic substance, political
stability, and asset security,and we are committed to the
cause of sustainable finance. Tofind out more about Guernsey's
success in sustainable finance,tune into our sister podcast,
the Sustainable Finance Guernseypodcast.
Today, I am delighted to bejoined by James Quarmby and
(00:42):
Emily Osborne of StephensonHarwood. On the episode, we'll
be discussing developments inthe world of pensions. Guernsey
is a domicile and its offeringand the impact of the global
elections. So without furtherado, welcome to you both.
James (00:57):
Thank you, Brandon.
Emily (00:58):
Thank you.
Brandon (01:00):
So firstly, obviously, you know, many of our listeners
hopefully know, you know, whoyou are and obviously a bit
about Stephenson Harwood and,follow you, on on LinkedIn and
various other sort of platforms.But, you know, just for those
who don't know, just introduceyourselves to our listeners, and
just tell us a bit about yourbackground and, of course, how
you ended up at Stevenson artStevenson Harwood.
James (01:21):
I'm James Quarmby, and I'm the founder of the private,
wealth team at StephensonHarwood, which is we now have, I
think, 55 lawyers across, 6 or 7jurisdictions. I've actually
lost count. It doesn't reallymatter. Emily and I have worked
together for a long time, and,one of our specialties has been,
(01:42):
pensions, law, and tax,particularly, non UK pensions,
and that's still what we do tothis day. Emily, what about you?
Emily (01:50):
Well, I'm Emily Osborne. I have been at Stevenson and
Harvard for nearly 10 years now,but I have worked with James
since 2008.
James (01:58):
Bloody hell.
Emily (01:59):
I know.
James (01:59):
Long service medal in the post.
Emily (02:01):
Hope so.
Brandon (02:03):
Brilliant. So let's kick off. Emily, if we could
just start with you, what sortof trends are you seeing in the
sort of, the the corporatepension market, if you like?
Emily (02:15):
So, obviously, pensions continue to be an important way
of incentivizing employees. Wesee particularly, well, I
suppose globally, I do a lot ofwork in the Middle East, and
they're although they call themend of service gratuity, so
they're not quite pensions, butthe idea of making some sort
provision for your employeespost service is definitely an
(02:38):
idea that is passing aroundwell, it is traveling globally,
and continues to be important tofind somewhere to have that sort
of offering for your employees.That doesn't mean that you're
doing it in lots of differentjurisdictions with different
rules and having to coordinatelots of different things. So I
(03:00):
think a continued importance ofpension. I mean, everyone's
getting older, so pensionscontinue to be a very important
part of everybody's financialplanning.
Brandon (03:10):
And, James, would you agree with that?
James (03:12):
Yeah. I think the interesting when when you look
at pensions market, you need tounderstand that that really the
the pioneers of pensions will bethose in, common law
jurisdictions, that are used totrusts. So when we're looking at
and, of course, we're used tothose in the States and then the
the UK. Over in Europe, they'remore contractual in nature. And
(03:36):
then when you move outside ofthat into Middle East and Africa
and so on, you you don't reallyget that separation between
what's promised by the employerand what's actually provided
after, you leave.
So if your employer goes bust,then your pension goes down the
toilet, basically. And that'sthe point of having funded
(03:57):
pensions. And and I think what'sgot interesting about the
international pensions market isthis idea that let's say you're
an employer in the Middle East,North Africa, whatever, that you
would fund a pension locally,but the custodian of that
(04:18):
pension will be outside of thejurisdiction, somewhere safer,
somewhere that does actuallyrecognize trust, for instance.
So it it's that intermediationfrom an asset protection point
of view legally, and and justreputationally as well.
Brandon (04:36):
Yeah. Definitely. And and sort of, I guess that sort
of transitions very well intothis sense of, you know, a
rising globalized world orperhaps it's been on on the on
the, you know, on the back footas of late, politically
speaking. But, generally, wespeak in speak in terms of being
in a globalized world and,increasingly, businesses operate
(04:57):
across border and so forth. And,inevitably, that means sort of,
you know, corporates employ aworkforce that's based in
various different geographicallocations, countries,
territories, that sort of thing.
How has that really impacted theneed for international pensions,
you know, at a global level, Isuppose?
Emily (05:14):
So I think there's sort of 2 parts to that. 1 is that
the employer is used toproviding pensions generally. So
they they do it for maybe in theUK or the US, and so they expect
to provide most of them providethe same benefits throughout the
world. So you start havingpeople in different
jurisdictions, you startintroducing them to pensions.
(05:35):
And then the second part of thatis that you only want you do
want an international pensionfor all of your workforce.
You don't want a pension inevery country that you have
employees because that would bea bit of a headache to
administer. And then I think theother side of it is that you
also end up having employees whoare perhaps used to having
pensions, who are working injurisdictions you don you don't
(06:04):
want a local scheme. So,ideally, you set up something
that works for everybody. Imean, it's probably not it's
quite tricky to work foreveryone, but that's the the
goal is to try and findsomething that works for
everyone. And then it is a agenuine international scheme
that you only have to have one,which perhaps a few tweaks to
make it work in the variousplaces.
Brandon (06:23):
Yeah. And and and I have to ask, of of course, how
are international financialcenters like Guernsey, suited to
meet the needs of the currentsort of market in the context
we're talking?
James (06:37):
That sounds like a leading question, Brandon.
Brandon (06:40):
So
James (06:43):
So I I think they're perfect. That's probably the
answer. Just stop. Yeah. I'm notsaying just stop there.
Completely perfect. I I think itgoes back to the point Emily was
making a minute ago. If you'rean international employer with
employees in 26 differentcountries, you really don't have
the time or energy to set up 26different pension schemes. And
(07:08):
your employees, as they movebetween different countries,
also do not want to collect 6 or7 different pensions, based on
their service in, you know,jurisdiction a, b, c, d, and e.
It is an absolute pain foreveryone.
And there's also this thingcalled political risk, which is
extremely important these days.Yes. It might be fantastic to
(07:33):
work and earn highly in a MiddleEastern country. I'm not gonna
name any, but just choose arandom one. And if there's a big
political risk and your schemeis located there and that
jurisdiction decides to abolishpensions or snaffle all the
assets, so you've you've got nocome back at all.
(07:55):
You're going to feel a lot saferif the pension pot that you
worked so hard to accrue is in ajurisdiction with a proven track
record of respect for law. Andrules, and is highly regulated.
And no one's gonna run away withyour money. Or if you're the
government, confiscate it.
Emily (08:13):
Something like Guernsey, perhaps.
James (08:14):
Well, I hear Guernsey is okay. Yes. As I said earlier,
it's probably perfect. I mean,as it happens, Guernsey is
extremely experienced in thepencils market. And and when
curaps were a big thing in itsheight, I mean, there must have
been there were, like, tens ofthousands of curaps a month
(08:36):
being created.
And and 2 thirds of thatbusiness was going to Guernsey.
There's a reason for that. Andand that's because there's the
infrastructure of serviceproviders, to to set up and run
those pensions. So to answeryour question, I I think
(08:56):
Guernsey has set itself up quiteefficiently as a preeminent,
location for, internationalpensions.
Emily (09:08):
You mentioned that? Yeah. Sorry. Yes. Sorry.
I don't think they've gotobviously, there's good pen
there's good law, so you canhave all your different types of
pensions. You've got quite a lotof certainty. There are people
who are experienced in runningpensions. And I mean, just to
sort of go back on theinternational thing, the reason
that curaps were very popularwas that it just reflects the
(09:29):
reality that people don't stayin one country all their life
anymore. So the reason peoplewere transferring is that they
left the UK.
They were somewhere else. Theysometimes didn't want the
sterling risk anymore becauseYeah. Currency fluctuation's not
ideal when you think that yourpot's worth x and then you find
it's not and it's just becauseof the currency. Having
somewhere like Guernsey to parkthe money safely was a Mhmm. A
(09:51):
really good option for it's lessso for Qurops now, but the the
point stands for internationalpensions that you can have you
don't want to be exposed tosterling necessarily.
Brandon (10:01):
Yep. Yeah. No. Definitely. And I was just gonna
mention there pick up on yourpoint, James, there about, you
mentioned the regulatoryenvironment.
How is Guernsey's pensionlegislation and and and regs
different from otherjurisdictions? And and in
addition to that, what role doesthe Channel Islands Financial
Services Ombudsman play in inthat within that sort of wider
(10:23):
picture?
James (10:25):
I think one of the most important things is having the
legislation in the first place.And and I think Guernsey was the
leader in having the right kindof legislation to enable us to
run a pensions there without,without any problems. Now there
there are other islands who'vebeen much slower in adopting the
(10:49):
kind of legislation that'sneeded to, to to run a pension.
And on the regulatory front, oneof the things that happened on
the CURAX side when the therevenue over here has been
trying to, restrict their usagewas to impose a requirement that
there's a pensions regulator.And, Emily, you've done a lot
(11:12):
more work on on that side, andthat was quite an important
move, wasn't it?
Emily (11:15):
Yes. And and Guernsey responded to that and has
regulation of pensions now,which, I mean, whilst regulation
can be somewhat hard work tocomply with, it does in the end
drive service levels and customwell, client security, really,
isn't it? That that you knowyour money is safe? So I think
(11:36):
it is a factor when you'relooking at where you might put
your pension scheme, especiallyif you are an international
employer. You need to justify toall your employees why you've
selected somewhere.
A a a jurisdiction that has astrong regulator, that has a
financial services ombudsman, soyou can take your complaints if
you're not happy with what'shappening, especially because
that's what we would be used todoing in the UK. It's an
(11:58):
important part of the factorsthat make you choose to use
Guernsey.
James (12:02):
I think it was one of those rare cases where it was a
regulation we were actuallyhappy with because we needed we
needed Guernsey to say itspensions business is regulated.
Otherwise, we couldn't qualifyas a cure Securinapse. Normally
normally, regulations, when theycome in, we grit our teeth and
say, okay. That's another onewe're gonna have to put up with.
(12:23):
In that particular case, it wasactually something it's a rare
rare case of where we said
Emily (12:28):
It's very rare
James (12:29):
case where James welcomes regulation. I never welcome
regulation listeners, but I'mset in that case.
Emily (12:36):
So well done, Guernsey.
James (12:37):
Yeah. We've
Emily (12:38):
got James to like regulation.
James (12:39):
Hats off. I thought we'd never
Brandon (12:41):
be go. One more question on Guernsey before we
sort of move on to to some othersort of topics. You mentioned
earlier on, sort of, in theconversation that, Guernsey does
have a long standing pensionsindustry. When you speak to the
decision makers, or the moversand the shakers, to what extent
(13:01):
is this sense of longevity of anindustry within a particular
domicile a deciding factor whenchoosing to select a a domicile?
Emily (13:11):
I think it's really important because whilst we like
to imagine that nothing willever go wrong, if something does
go wrong, you want to besomewhere where you know that
the courts and the lawyers andthe system knows what a pension
is, and you know what theanswer's going to be because
they've got a history of dealingwith it. You know that the
people managing your pensionknow what a pension is, know how
(13:33):
to run it, have been doing itfor a long time. But I think it
is really important when you'reI mean, new things are cool.
Right? But you don't necessarilywant to be at the forefront of
risking your pension.
James (13:45):
I I'd agree with that. I I I think clients will rely on
their lawyers to tell them thekind of pension they need and
where it should be. And I don'tlike my clients to be guinea
pigs for new jurisdictions andnew products. I don't enjoy that
ride at all. I think if you ifif you want excitement, there
(14:05):
are other ways of finding it,but not not with your pension.
I think we all accept that apension is there, as as a safety
net for you.
Emily (14:12):
Yeah. I mean, it's a security blanket, isn't it? So
you want to know that it worksYeah. And that it's safe. So
it's important that that you canshow that there's a track record
of dealing with things in acertain way.
James (14:25):
So Guernsey should carry on doing what it's doing.
Brandon (14:28):
Brilliant. There we go. Talking less directly to to to
Guernsey, are there any othersort of considerations that
really come in to the mix, whendeciding on a jurisdiction? And
how important are thejurisdiction structures in this
decision making? Because,obviously, we've talked about
(14:50):
the sort of the importance of,you know, strong and stableness,
if you like, and sort of and theimportance of political and
economic stability and importantand stable, but well respected
and flexible regulation and allthese sort of points that come
up in a time and again.
But, yeah, really on the on onthe on the structure side,
what's the where does it sortof, tilt the table for you?
James (15:13):
Selfishly, I like the jurisdictions to be within 1
hour, plane journey of Gatwick.So, but no. Seriously.
Emily (15:26):
Well, so I was gonna say before you got got flight time
into why you might choose ajurisdiction
James (15:31):
That's important.
Emily (15:33):
That in terms of structures, I think Guernsey I
know this wasn't directly aGuernsey, but the thing Guernsey
had to talk about was that youcan have a contract based
scheme. Yeah. Because,obviously, we're all common law
lawyers. We love trusts. We knowwhat trusts are.
They are perfect for pensions.But in some jurisdictions,
particularly in Europe, they arenot perfect because they don't
(15:54):
know what they are and they endup being taxed really badly. And
it's better if you can arrangesomething in a contract form to
bring yourself within the, rulesthat they know what it is and
how it gets taxed. And,certainly, when I've worked with
various providers in Guernsey,they've been quite, you might
say, innovative, or certainlyflexible in creating products
(16:16):
and structures that work fordifferent jurisdictions. So you
might have a contract basedscheme and it uses a ICC or a
PCC or something like that.
So there's definitely I thinkhaving a range of structures,
particularly because we'retalking about international
pensions and internationalpeople, you can't just have one
thing and expect it to work foreveryone because the world is
(16:37):
different in different places.
James (16:39):
Yeah. And come I think it goes back to a point we made
earlier about having the rightkind of law. Mhmm. So, you know,
trusts have typically beenpensions for we, Commonwealth
people. But some jurisdictionsdo not recognize pensions, and
that already creates a problem.
And then if you go for acontract based scheme that's
(17:00):
quite small, people then worryabout cross contamination of
risk because a contract is not atrust. And then you've actually
got legislation that's on thebooks in Guernsey already
because PCC's protected cellcompanies were created for the
insurance business in in in inGuernsey. And I think ICC's
(17:20):
similarly, but I think it justshows you that that there's a
there's a menu of, optionsavailable that Guernsey has been
quite innovative in creating.And, actually, the PCC
legislation, which I thinkstarted in Guernsey, has been
copied by quite many
Emily (17:36):
In other places.
James (17:37):
It
Brandon (17:37):
started here in 90 7, the 97, I think, it launched.
Emily (17:41):
Well done.
James (17:42):
There you go. Now you done done your homework. I
didn't know that.
Emily (17:45):
You do now? Yeah. My daughter tells me you should
learn something new every day,so that can be your lesson
today.
James (17:50):
There you go. 97 PCCs.
Brandon (17:54):
Yeah. So you mentioned, well, I guess that sort of is
the answer to the next question,isn't it? What structures in
particular tend to influencethese decisions? I guess PCCICC
is a protected cell company,incorporated cell company are,
of particular interest. Is thereany is there any others sort of
again, or
Emily (18:14):
But no. I mean, I think that's having that with a
combination of a contract basedscheme or having a trust based
scheme for
Brandon (18:21):
Yep.
Emily (18:21):
Other, things. But, really, it's about having
flexibility and and adapting thesolution to the problem. So any
there are any other structures
James (18:30):
Well, I mean, there's there's only so many options you
need for pensions. It's eithertrust based or contract based.
Yeah. And the rest is just alittle bit of noise, really. I
mean, that's that's that's allyou need.
But we mustn't forget that a lotof jurisdictions cannot offer
that. Or even if they do, thethe local professionals are not
(18:54):
really on top of it. And that'sthe other point. There there are
a number of examples in theinternational finance world
where jurisdictions haveintroduced quite interesting
legislation to attract businessin. But, unfortunately, the
professionals in thosejurisdictions, don't really know
how it works.
(19:15):
And so you got you got to havethe legislation itself and the
professionals who know how itworks. And and running a pension
is different to running a familytrust.
Emily (19:25):
I was also gonna add that it's not only the professionals,
but also, for example, inGuernsey, the Guernsey tax
office because I guess it's thebenefits being a small island,
right, that you can go and askthe Guernsey tax office how a
particular pension payment outto somebody will be treated,
whether you whether they'veretired. I mean, talking there
are certain professions,obviously, that Guernsey the
(19:46):
Guernsey tax office accepts thatpeople in those professions
luckily get to retire pre 50 5.But you can just go and have a
discussion with them. So you'vegot the regulator and the tax
office, and they're actuallythey're doing their job, but
they're also very accessible, soyou can find out the answer. I
mean, you can't get an answerfrom HMRC.
I mean, they don't even answerthe phone, I think, according to
the press. So
James (20:05):
Well, they were they were gonna shut down the helpline for
4 months a year.
Emily (20:09):
Yeah. Oh, no. So I think that's another so it's part of
that adding to the professionalsand and everyone else in the
island is having the regulatorsbeing approachable.
James (20:19):
Town's office And knowledgeable. Yeah. I'm I'm
quite tired of getting advice inother countries, and I I hear,
well, the tax authority doesn'tknow how to treat that trust,
that product, that whatever.That's incredibly irritating.
What you want is a certainanswer.
And that kind of ruling whereyou can just ring up the
(20:41):
Guernsey Revenue Service and askthem, it gives a lot of comfort
to clients.
Brandon (20:48):
In recent years, we've seen, pensions increasingly
being used as part of sort ofsuccession planning. Emily,
what's driving this?
Emily (20:58):
Well, I mean, partly, I think it's, everyone's getting
older. You need to make someprovision for retirement.
Partly, it's because they havebeen an efficient way of
structuring things. I've had afew you know, you kinda get
those entrepreneurial clientsthat have not their business is
their pension and then they selltheir business and they're
(21:18):
probably gonna do something elsebecause entrepreneurs are
incapable of not startinganother business with their next
great idea. They're irritatinglysuccessful sometimes, or I'm
just jealous.
But they also there's a I havehad a few of those where, like,
I need to lock some money up.Eventually, I'm going to retire.
I do need to have some money.Let's put some money aside. And
(21:40):
I don't you can't just put it inan account somewhere.
I want it in a pension so that Iknow that I can't spend it
beforehand and it will be thereand the people that will run it
will do it properly. So I thinkthere's a sort of a part of
succession is making for yourown succession, not necessarily
for the next generation. And Isuppose in a certain way also,
(22:00):
there is more limited optionsnow in what else you might do.
So you people have looked at atpensions, and and certainly in
the UK, your ability to putmoney into a a registered
pension scheme is severelylimited, so which is sort of
crazy because we're all gonnalive longer and everything's
expensive, and we're going toneed to fund stuff later. So you
(22:21):
do need to make provision foryour retirement.
So I think all of those factorshave made pensions, more I was
gonna say exciting, but
James (22:33):
I don't think pensions are ever exciting.
Emily (22:34):
Why I hesitated.
James (22:35):
Over breaking that pudding.
Emily (22:38):
More, Interesting.
James (22:40):
Yeah. Anyway, move on.
Brandon (22:42):
There we go. Move on.
Emily (22:43):
So we're gonna talk widely adopted, maybe.
Brandon (22:45):
Well, there you go. Yeah. We're gonna talk about
something that's slightly maybemore interesting now. Obviously,
the hot topic on everyone's lipsis the general election. The
Labour Party, in the UK hasannounced that it will not seek
to reintroduce a lifetimeallowance on pensions.
What do you think, theimplications of such a policy
will be on the industry, bothdomestically in the UK, but also
(23:07):
sort of, you know, with aninternational outlook as well?
James (23:10):
Well, it's obviously good news that labor's not gonna
reintroduce the lifetimeallowance. That's not because
they're particularly generous topension savers. I think they're
actually worried about theimpact on consultants in the NHS
and other people, on, that kindof, employer funded pension. So
(23:37):
but that's good news for othersavers, anyway, that the
lifetime allowance, is a pain.
Emily (23:45):
But, I mean, it would be really good as I understand it.
The I don't think they're quiteat that level now, but until
recently, the revenue have beenissuing almost guidance almost
weekly on how the removal of thelifetime allowance and the
replacement thing will work, andit doesn't seem to still be
quite right. So, hopefully,we'll get some clarity on that
(24:05):
now that Labour said they won'treintroduce it. They could
perhaps fix the mess that's beencreated from having removed it.
Because I mean, I'm not joking.
Some in some circumstances, thecurrent official guidance is
just don't draw down. It's notreally a solution. I mean, I
want my pension. I've got to Iobviously, I'm not 55. I know
it's a podcast, so people can'tsee that, but I'm not.
James (24:26):
She's not. The, I can vouch.
Emily (24:29):
Thank you, James. But you don't wanna be told that you
can't take it because even thepeople that create the rules
don't know how what theinterpretation of it, which kind
of goes back to our earlierpoints about Guernsey and
certainty. And, I mean, and allof those things that you want
from your pension, we don'tcurrently have. Yeah. So labor
could definitely just make thata little bit clearer.
(24:50):
What else that I mean, this kindof an IHT possible risk in
relation to labor and pensions,do you think, James?
James (24:54):
I I think I think labor's got its eye on IHT and how it
can squeeze a bit more out. Ithink it's gonna be influenced
by some of the utterances fromthe IFS on the topic of pensions
and IHT. So I think I thinkthere will be, I think there
(25:15):
will be some a couple ofchallenges, but I don't I don't
think, that it's going to be abig deal because, ultimately,
Labour does not want to scarethe horses. They want to
proceed, cautiously andcarefully, and that's certainly
the, message that I've receivedfrom some of my contacts. So I
(25:37):
don't think we should be in thebusiness of scaremongering.
I think it would be a good thingif, the pension's legislation
was rationalized and we all knewwhere we were. That's the least
we can ask from our politicians.
Emily (25:47):
We want for for pensions as we've been talking about.
James (25:50):
We don't wanna end the podcast on that, though. That's
fine. I think Brandon's god tofire things up a little bit.
Brandon (25:58):
So finally, you are both speaking at, a joint
Stephenson Harwood and andGuernsey Finance pension seminar
at 12 Hay Hill in London. Whatcan people hope to learn by
attending the event? Why shouldpeople come along?
James (26:12):
Who are
Emily (26:12):
we gonna learn? Well, I think we've got quite an,
interesting array of of, topicsbeing covered, including, like,
the you can learn more aboutwhat all the random acronyms,
some of which we've been usingtoday Yeah. Mean in the pensions
world, a discussion about what'shappening in Guernsey, the
changes in Guernsey in thepensions world. Right.
James (26:30):
It's going
Emily (26:30):
to be bit of a global what's happening in Yeah. Other
places like Dubai and MiddleEast.
Brandon (26:36):
Brilliant. Well, thank you very much both for your,
your time today and for joiningus on the podcast.
James (26:41):
Thank you, Brandon.
Emily (26:42):
Thank you.
James (26:43):
It was really great to talk through
Brandon (26:44):
the changes taking place across the pensions
landscape, trends seen acrossthe globe, and what we might be
in store for the future. Thanksalso to you for listening. If
you enjoyed this thisdiscussion, we have a backlog of
interviews on the GuernseyFinance podcast channel. You can
check them out by searching forGuernsey Finance on your
preferred podcast platform. Wealso have links to James and
(27:05):
Emily and, as as, of course, aswell, Stevenson Harwood in our
show notes.
So check them out to hear morefrom them. To find out more
about Guernsey and itsspecialist financial services
industry, head over to ourwebsite, guernseyfinance.com. We
look forward to welcoming youback to the podcast soon, but
until then, it's goodbye fromGuernsey.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.