Guernsey’s Committee for Employment & Social Security will go out to tender in the next few weeks for a provider of a secondary pensions scheme following the withdrawal of Smart Pension Ltd as the preferred provider.
Initial discussions have taken place with local pension providers, from which the Committee has determined that there is significant interest in providing the scheme.
In February 2020, the States agreed that Smart Pension should be appointed to deliver administrative and custodianship services. Following changes to the commercial landscape in which the company operates since their selection as the preferred provider in 2019, it is no longer possible for Smart to proceed on the basis of the terms set out in their tender and approved by the States.
The Committee is still targeting an implementation date of January 2023 but recognises that this may be challenging.
Significant engagement will take place with employers and pension providers in the lead up to the launch of secondary pensions to make sure that businesses are aware of their obligations. The Committee is very conscious of the need to provide employers and pension providers with adequate lead-in time to prepare.
Deputy Peter Roffey, President of the Committee for Employment & Social Security said: “We’re obviously disappointed that we won’t be able to deliver the secondary pensions solution we had envisaged in partnership with Smart. We understand Smart’s reasons for having to withdraw as preferred provider and we thank them for the engagement we had with them.
“The withdrawal of Smart does, however, create an opportunity for a locally-based pension provider to play a crucial role in the introduction of secondary pensions in Guernsey. We’ve been encouraged by the discussions that have taken place to date and look forward to further engagement in the coming weeks.”
Under secondary pension legislation, employers will be required to contribute at least minimum levels into either a qualifying pension scheme or into the new secondary pension scheme following automatic enrolment of their employees.
The main aim of the secondary pension scheme is to support more working age people to save for their retirement, thereby enabling them to enjoy a more comfortable retirement and controlling welfare expenditure in the longer-term.
Stephen Ainsworth, Senior partner of BWCI, said: “It is encouraging that the ESS Committee has recognised the strength and depth of the pension industry in Guernsey and has made efforts to enable local providers to bring their expertise in world leading solutions to the local market place.”
