BWCI is encouraging employers not to delay their workplace pension arrangements, after the States agreed proposals for the biggest transformation to retirement savings the island has ever seen.
At their meeting today politicians approved the secondary pensions proposals, which will create a big change to the culture around retirement savings. Employers will be legally required to offer a workplace pension to their eligible Guernsey, Alderney, and Herm employees.
There will be a lead-in period for the requirements, which will start with larger employers. Medium-sized and smaller employers will be phased in later. The centrepiece of the secondary pensions scheme is auto-enrolment, which should encourage all Guernsey employees to make long term savings towards a more comfortable retirement.
Stephen Ainsworth, the BWCI Senior Partner said “We have been talking to States members over at least three political administrations with a view to introducing better pensions provision and it’s great news that the implementation of secondary pensions has now been confirmed by the States. Over the years this will make a real and positive difference to the increasing numbers in our retired population.”
Initially, those included in secondary pensions will contribute 1% of their earnings, and this minimum contribution will be matched by the employer. Eventually, over the course of nine years, the overall minimum contribution will increase fivefold. Employees will contribute 6.5% of their earnings, and employers will pay in with 3.5%.
BWCI will be organising seminars to take place in January, to raise awareness of what secondary pensions will mean, along with the choices available to employers.
John Martin, a partner at BWCI Group, welcomed the clarity given by today’s States decision, and said it was a forward-thinking move that would help a greater number of people to live a comfortable and fulfilling retirement.
He added that the countdown to secondary pensions had already begun.
“Instead of leaving it to a last-minute scramble, many employers are getting a head start and making sure they are ready to go when the legislation comes into force by establishing pension schemes now. A key consideration is that the jobs market is extremely tight and if employers are not offering their staff a decent pension, it will inevitably affect recruitment and retention. Many employees are now demanding that their job offers this benefit.”
If you want to find out more about our different pension products in Guernsey, you can speak to our experienced and trusted team on 728432 or email pensions@bwcigroup.com.