The Guernsey Committee for Employment & Social Security has confirmed that the Your Island Pension scheme will be available on a voluntary basis from 1st January 2024.
However, the Committee has agreed to revise the date from which it will be mandatory for larger Guernsey and Alderney employers to provide a secondary pension scheme from 1st January 2024 to 1st July 2024.
From 1st July 2024, larger employers (those with 26+ employers) will be required to enrol their employees into an approved secondary pension. Over the following 15 months, smaller employers will also need to provide approved secondary pensions for their employees on a phased basis. The date from which this obligation will apply to individual employers will depend on the number of employees they have. Employees will be able to opt out of the secondary pension arrangement made by their employer if they wish.
Full details of the Your Island Pension (YIP) scheme and the mandatory requirements of the secondary pension policy will be made available to employers by July this year at the latest, ensuring that they have at least 12 months to prepare. More information, including regularly updated FAQs, can be found here.
The aim of secondary pensions is to ensure Islanders have a good quality of life in their later years by providing them with the opportunity to save more now for their retirement. It is estimated that approximately 65% of the employed working age population are not making any personal pension provision. By ensuring Islanders are able to count on a good pension, it will reduce the demand on tax-funded income support for those over retirement age in future years.
To support the initiative, the States have facilitated the establishment of YIP. YIP will be separate from other States functions and governed independently by Sovereign Pension Services (CI) Limited. Employers also have the choice to enrol their employees in any other alternative qualifying scheme from another provider.
Deputy Peter Roffey, President of the Committee for Employment & Social Security said: “Secondary pensions are of paramount importance to individuals and to the future of the Island. Our population demographic is changing, with people living longer on average. By encouraging working age people to save more for their retirement, we aim to avoid the prospect of a major problem with pensioner poverty whilst also maintaining a sustainable welfare budget in the long-term.”
Sean Gillease (pictured), Managing Director of Sovereign Pension Services (CI) Limited, said: “We are excited to be working with the States of Guernsey to deliver Your Island Pension, an affordable secondary pension scheme. Together with the States, we’ll be providing more information on the scheme between now and July this year, meaning employers will have a least 12 months to prepare for it. And of course, by making the scheme available from January 2024, employers are more than welcome to sign up sooner.”
