The Pensioneer Trustee Company (Guernsey) Limited


The International Risk Purpose Trust (IRPT)

Purpose Trusts have been around for a number of years in various forms. Jurisdictions such as Guernsey, recognised that there was a need, in the commercial world, for a vehicle which could be used for commercial transactions where it was preferable for assets not to be owned by a person or company and which did not "belong" to any person, beneficially.

As a result legislation has been developed to provide for the creation of purpose trusts. Following on from this we have seen the development of a range of innovative solutions allowing corporates to ring-fence certain activities and place assets into trust for a specific purpose.

The traditional uses of a purpose trust have developed into what is now commonly referred to as a Risk Purpose Trust. Where a company is faced with potential business risk, the level of which is not easily quantified in terms of either amount or timing, they may consider the use of an IRPT where previously they would only have had access to traditional and more rigid insurance-based products.

Risk Purpose Trusts have been successfully used to provide corporate healthcare. Traditionally this has been provided through an insurance-based solution, that has the sole purpose of providing for group medical cover. The IRPT can be used to make provision for this without the costs associated with an insurance-based product.

IRPT Structure

The International Risk Purpose Trust is established in accordance with Guernsey trust law and can be written to encompass rules, conditions or prohibitions.

Each trust will be established by a Scheme Sponsor – in this case a corporation, and an independent corporate trustee will be appointed. The corporation will make contributions into the trust: the trustee will then hold and administer the funds so as to meet the terms of the trust instrument and the purpose of the trust.

IRPTs can be written with a single purpose, eg. to provide private medical cover or as a multi-purpose corporate scheme which might include: death in service; critical illness; gratuity payments; incentive payments and bonus payments. The multi-purpose scheme will provide greater flexibility and adaptability and allow the corporate to segregate risk by type, and to offer it within the group either by subsidiary, brand or geographical location. This would allow the trust to admit International subsidiary companies of a group for some or all of the specified purposes.

The IRPT can be used as a cost-effective alternative for provision of cover for risks associated with the provision of employee benefits. However, it can also be used across a wider range of Group risks; for example: to provide for directors' liability; professional indemnity; catastrophe; rating downgrades or funding unforeseen business expenses.

  • Key Features:
  • No Insurance Premium Tax; 9.5% p.a.Insurance Premium Tax does not apply 
  • Lower Margins; lower profit margins with an IRPT, in contrast to an insurance solution, represent additional cost savings. 
  • Excess Funds Reduce Overall Cost; should the claims be less than the funds held to meet these, the IRPT retains this excess and not the insurer. 
  • Annual Contributions; negotiated with the trustee set by negotiation with the trustee based on past experience and not dictated by the insurance company. 
  • Economies of Scale; as one central scheme covering employee benefit risks across the global may be established. 
  • Difficult Risk Areas; ability to cover risk in particular those which are unavailable or expensive to re-insure. 
  • Lower Default Risk; unlike insurancebased solutions which could be at risk of a full default. 
  • Ability to Run Insurance Alongside; an IRPT could be used for parts of the Group but traditional insurance for other risk areas. 
  • Swift Administration of Claims; in conjunction with the HR department, claims may be processed in an efficient manner on self-insured schemes. 
  • Flexible Time Horizons; Schemes may be revocable and established for a short period.



Further information

Please feel free to get in touch if you would like any further information, or to find out which of our services may be best for you or your company.

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The Pensioneer Trustee Company (Guernsey) Limited
2nd Floor, Maison Trinity,
Rue du Pre, St Peter Port,
Guernsey, Channel Islands, GY1 1LT

Registered No.27891

+44 (0) 1481 743760

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Regulatory Information

The Pensioneer Trustee Company (Guernsey) Limited is licensed by the Guernsey Financial Services Commission under The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2020, as part of a Group of which PTC Fiduciaries Limited is the Primary Licensee and The Pensioneer Trustee Company (Guernsey) Limited is a Secondary Licensee and is permitted to carry on by way of business, regulated activities under s.2(1)(e) of the Law.