If your contract of employment makes membership of your pension scheme compulsory, you won't be able to opt out of the pension scheme.
Your employer must provide a pension scheme that meets the legal requirements
- Provided you meet the eligibility criteria, and your employer hasn't already provided you with a pension scheme, they will need to provide one that you can join. They can do this by working with a private pension provider and setting up a pension scheme with them. If they don't set up a scheme directly with a pension provider, they will need to register with Your Island Pension (YIP) which is a scheme the States of Guernsey has set up with the Sovereign Pension Services (CI) Limited. YIP is separate from any other States of Guernsey function, so it is completely independent from, and not linked in any way to the State Pension.
- As your contract of employment states that the pension scheme your employer has set up is compulsory there is nothing for you to do; you must be in their pension scheme, and you will not be able to opt out.
Your employer must pay at least a minimum level of secondary pension contributions if you remain in the pension scheme
- The employee contributions you pay will depend on the pension your employer has set up. The minimum secondary pension contributions that need to be made are a percentage of your earnings so if your pay goes up, you will pay more into your pension pot. The secondary pension contributions will usually be made up of employer contributions and employee contributions. Your employer can choose to pay the full amount of the secondary pension contributions, in which case you would have nothing deducted from your pay. However, they cannot ask you to pay in more to cover their contribution as well as paying your own. Further information on this can be found on the How much do we need to pay? page.
Your employer can postpone your enrolment into the pension scheme for a maximum of 3 months
- Your employer may tell you that they are postponing the date on which they will enrol you into the scheme and they are allowed to this for a maximum of 3 months if you are a Desigated Employee. Your employer won't be able to extend this period so once you have reached 3 months employment with them your enrolment into the scheme must start immediately. If you do not return your completed Notice to your employer before the deadline, they are required to enrol you into their pension scheme.
- If you are a Voluntary Employee, you have to be enrolled within a month of your request or within 3 months of your last opt out, whichever is the latest (see glossary for definitions of Voluntary and Desigated Employee).
- If they do this they will need to provide you with written confirmation of what is happening and when you will join, this can be detailed in your contract of employment. For example, to reduce the frequency in which they enrol new members or, if you have a probationary period, they may want to wait to make secondary pension contributions until you have reached some objectives or milestones in your role.
- Your employer is not allowed to issue you with lots of short-term contracts that defer, or prevent you joining the pension scheme, even if they issue the contracts using different company names. If you are concerned that this is happening, you should report the employer to the Revenue Service. Visit the Employment and Equal Opportunities Service website for further information if you have concerns regarding your contract of employment.
