Select a region
The roll out of a legal requirement to provide secondary pensions begins in less than a month, and has been hailed as one of “the most significant pieces of legislation brought into effect during this political term”.
The States of Guernsey want to make sure that all employers who are required to automatically enrol eligible employees into a scheme have done so by 1 July.
From this date, any business with 26 or more employees must automatically enrol eligible employees into an approved pension scheme.
Three months later the requirement extends to those with 11 to 25 staff and more will then also be brought into the net until everyone is covered by October 2015.
Most employees aged between 16 and State Pension Age will be eligible for automatic enrolment.
To ensure that everyone will have access to an affordable pension scheme, the States has helped establish Your Island Pension, which is governed independently by Sovereign Pension Services (CI) Limited.
Employers can select any qualifying pension scheme, but if their pension scheme is not made compulsory in their contracts of employment, they may also need to offer this scheme as an alternative.
The decision to establish a secondary pension was made to reduce the burden on tax-funded welfare benefits and the States Pension later in life, as it’s understood that 65% of Guernsey’s employed working age population are not saving for retirement.
“I am confident that, even though the benefits of this legislation will take time to bear fruit, secondary pensions will end up being one of the most significant pieces of legislation brought into effect during this political term,” said the President of Employment and Social Security, Deputy Peter Roffey.
“The intention and the experience from elsewhere is that most people who have been enrolled into a pension scheme will choose to stay in, and this will result in a significant number of people saving more for their retirement.
“Making sure every working adult is able to save toward a workplace pension scheme will support future generations of pensioners to achieve a more comfortable and financially independent retirement. This will help to avoid the prospect of a major problem with pensioner poverty whilst also maintaining a sustainable welfare budget in the long-term.”
You can find out more information ONLINE.
Comments
Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.