The Guernsey government has passed proposals that will make it a mandatory requirement for all Guernsey-based employers to enrol their eligible employees into a qualifying employer sponsored pension scheme under what is being called the ‘Secondary Pensions’ regime.
Secondary pensions will be similar to ‘auto-enrolment’ in the UK, introduced in 2012, which made it compulsory for UK employers to enrol their eligible workers into a pension scheme. Employers and employees now both pay money into a pension scheme at a minimum level prescribed by the UK government and the same format is being proposed in Guernsey.
The Secondary Pensions regime aims to ensure that the majority of the working population is saving adequately for retirement. The government of Guernsey will provide employers with access to a default secondary pension operated by Smart Pensions in the UK, however employers can also choose a ‘qualifying scheme’ provided by a suitably licensed and regulated local pensions provider such as Sovereign.
This will be the most significant reform in the Guernsey pensions industry in recent times and will result in a high number of employers looking for suitable and cost-effective solutions. Sovereign is very well placed to assist local employers and, as an independent provider, can work in conjunction with any employer, investment partner and suitably qualified financial adviser, as required.