Top 5 Questions Small Businesses Ask About Gibraltar Workplace Pensions
Setting up a workplace pension under Gibraltar’s Private Sector Pensions Act can feel complex, but it does not need to be. Here are the five most common questions small businesses ask and straightforward answers to help you navigate your obligations.
1. Do I still need to offer a workplace pension if some employees already have personal pensions?
Yes. Even if your staff contribute to personal pension plans, that does not meet your legal obligations under the Private Sector Pensions Act. Employers must offer a workplace scheme to eligible employees. The scheme must be an occupational pension scheme registered and authorised by the GFSC.
If an existing scheme already meets the minimum requirements under the Act, you may not need to change it, but this requires careful review and registration with the Commissioner.
Takeaway: Personal pensions do not exempt you from providing a compliant workplace pension. Check whether your current arrangements satisfy the law and how you can integrate or supplement them efficiently.
2. What if our business has high staff turnover – do I need to enrol every employee?
Yes, if they meet the eligibility criteria set out in the Act. An eligible employee is someone who:
- Is over the age of 15
- Has worked for you for one year or more
- Has gross earnings of at least £10,000 a year
This means part-time, zero-hours or short-term workers may need to be enrolled if they meet these rules.
High turnover can create concerns about paying into pensions for staff who leave soon after enrolment. By structuring your scheme carefully, you can manage risk and ensure contributions benefit employees who stay long-term.
Takeaway: High turnover does not exempt you. Smart vesting rules and good onboarding processes can limit unnecessary costs while keeping you compliant.
3. We don’t have an HR department – how much extra administration will this create?
This is a common concern, but the right provider can make administration simple.
At Sovereign, for example:
- Our Employer Self-Service (ESS) portal allows you to upload joiner data and monthly contributions easily
- Our Member Self-Service (MSS) portal gives employees secure access to view balances, update details, check contributions and switch investments
- We integrate with EasyPay, Gibraltar’s leading payroll software, so contribution data flows seamlessly from payroll to pension
Our Gibraltar-based team can also provide training and support to make the process straightforward.
Takeaway: With the right provider and technology, pension administration becomes a simple monthly payroll task, not a full-time HR burden.
4. How much will it cost my business?
There are three main cost areas:
- Contributions
Employers and employees must each contribute a minimum of 2% of gross earnings. Employers can choose to contribute more to enhance their benefits package. - Implementation fee
A one-off setup fee covers establishing the scheme, onboarding members and ensuring compliance. - Ongoing administration fees
Annual fees cover scheme administration, Trustee obligations, record-keeping and reporting. Statutory fees payable to the GFSC or for financial statements are paid by the employer as a disbursement.
At Sovereign, we offer:
- A fixed implementation fee
- Ongoing administration fees based on Assets Under Administration, deducted annually from member accounts
- Three tiers of workplace pensions to suit different needs:
- Tailored Plan: Fully customisable with broader features
- Core Plan: Standardised format with shared external costs
- Foundation Plan: Streamlined, compliant and cost-effective
Takeaway: Costs are predictable and easy to plan for. The right scheme depends on your business objectives and level of flexibility required.
5. What happens if I fail to comply or make a mistake?
Non-compliance or mismanagement can create risk, but there are clear steps to reduce it:
- The GFSC acts as Pensions Commissioner and oversees compliance
- You must notify the Commissioner when you set up your scheme and report changes within 30 days
- Common mistakes include missing deadlines or failing to enrol eligible employees
Working with a provider like Sovereign means you benefit from tested systems, monthly reporting and local support, reducing administrative risk.
Takeaway: While there is regulatory risk, proactive setup and the right partner help you meet your obligations confidently.
Final Thoughts
For small businesses in Gibraltar, implementing a workplace pension is a legal requirement. But it is also an opportunity to strengthen your employee value proposition, improve retention and show you are invested in your team’s future.
As part of Sovereign’s support for Gibraltar businesses, Gibraltar Federationf of Small Businesses (GFSB) members receive a 30% discount on setup costs. Speak to us or the GFSB team to find out more.
If you have questions or would like help reviewing your current pension arrangements, our Gibraltar team is ready to assist. We can guide you through setup and keep you compliant with minimal fuss.
