This Law requires, subject to certain conditions, the following:
You must provide a pension scheme that meets the legal requirements
- If you haven't already provided a pension scheme, you will need to provide a scheme that your workers can join.
- You can do this by registering with a Pension Provider of your choice and setting up a pension scheme. To ensure that everyone will have access to an affordable pension scheme the States of Guernsey have facilitated the establishment of a new pension scheme, Your Island Pension (YIP). YIP will be separate from other States functions and is currently governed independently by Sovereign Pension Services (CI) Limited. Employers will be able to use this scheme, or another eligible scheme of their choosing.
- Pension Providers will be able to give you confirmation that they meet the legal requirements, any pension schemes that meet the standards are officially referred to as an Approbated Pension Scheme. If you are using a Defined Benefit scheme they must include an Actuary's report to confirm that it meets the standards and you will need to ask them to provide this to you on a regular basis. Your Pension Provider will let you know if this applies to your scheme.
- If you already have a scheme set up, you must check with your Pension Provider to make sure your pension scheme complies with the Law. Your Pension Provider will be able to tell you if anything needs to change. If you haven't discussed this with them already, make sure you get in touch with them to review this as soon as possible.
You must automatically enrol Designated Employees into the scheme or enrol them back in every three years if they opt out
- For information on Designated Employees please refer to Designated Employees
You must pay at least a minimum level of contributions if they remain in the pension scheme
- The contributions are usually made up of Employer Contributions and Employee Contributions, and the amounts to be paid will depend on the pension you have set up. The Minimum Contributions that need to be made are a percentage of the Earnings of an Employee and the overall amount can be paid by the employer if they wish to do this as part of their remuneration package. Further information on contributions can be found under the How Much do We Need to Pay? page.
You cannot prevent an Employee from joining the scheme or encourage them to opt out of it once they are in
- You cannot ask these individuals to leave the scheme whilst they are working for you and you are not allowed to offer any incentives to leave it either, so you can't offer more pay or any other rewards to someone if they leave the scheme. It is not acceptable to dismiss someone for refusing to opt out of the scheme, we hope employers will not try to use the membership or potential membership of a secondary pension scheme as a reason not to employ someone. The States of Guernsey will review and consider whether any enforcement measures are needed if recruitment decisions are made based on the membership of a pension scheme.
You can postpone the enrolment into the pension scheme for your Employee for a maximum of 3 months
- You can postpone when you enrol your Employee into the scheme, and you are allowed to do this for a maximum of 3 months. If you do this, you will not provide them with the Notice of Immediate Enrolment and will instead need to issue them with a Notice of Deferred Enrolment on or before their first day of employment. You must provide them with written confirmation of what is happening and when they will join, just like the Notice of Immediate Enrolment, the Notice of Deferred Enrolment will include deadlines for completion and the choice they are making. There are benefits in postponing the enrolment date as you will be able to reduce the frequency in which you enrol new members.
- The 3 month period is not contract specific, someone may have multiple contracts issued during the course of their employment but the deferral period only applies to the first 3 months with an employer. Compliance checks will be carried out by Revenue Service to ensure that employers do not rotate contracts through different companies to try to continually defer Automatic Enrolment. If this does happen the Revenue Service will impose penalties on those employers.
