Pensions deadline approaches for larger firms

The change comes into place for larger companies on 1 July

Larger companies in Guernsey and Alderney have less than a month before the new rules around secondary pensions come into place.

Companies with more than 25 employees must automatically enrol eligible employees into an approved pension scheme from 1 July.

Most employees between 16 and the state pension age will be eligible, though they can opt out under certain circumstances.

Deputy Peter Roffey, Employment & Social Security President, said the change in law was among the "most significant pieces of legislation" brought in this term and would "result in a significant number of people saving more for their retirement".

About 65% of people are thought not to be saving for their retirement through a personal pension scheme, according to the States.

The new rules are being phased in, with smaller companies needing to comply over the following 15 months.

When do companies have to sign up?

• 26+ employees: 1 July 2024

• 11-25 employees: 1 October 2024

• 6-10 employees: 1 January 2025

• 2-5 employees: 1 July 2025

• 1 employee: 1 October 2025

Employers can select any qualifying pension scheme, but the States has introduced its own scheme, called Your Island Pension (YIP), to make sure everyone has access to an affordable pension scheme.

YIP will be operated independently of the States by Sovereign Pension Services (CI) Limited.

Mr Roffey said: "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."

The States said it hoped the scheme would reduce the demand on tax-funded income support for retired islanders.

Mr Roffey said: "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."