This Law ensures, subject to certain conditions, the following:
Your employer must provide a pension scheme that meets the legal requirements
- If 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.
- Your Contract of Employment may specify the pension scheme you need to join and that it is compulsory. If it isn't compulsory, and you meet the eligibility criteria (above) you are able to join it and will need to ask your employer what they require for this to happen.
- If you already have a personal pension that you are paying into and it meets the legal requirements (officially known as an Approbated Pension Scheme), you can ask your employer to contribute to this instead. It is up to your employer whether they decide to use the pension scheme that you are already paying into, or one that they have set up on your behalf. If they agree to use your pension scheme your Pension Provider will be able to provide you with documents to show that it meets the legal requirements and give you information on what you and your employer need to do.
Your employer must Automatically enrol Designated Employees into the scheme and enrol them back in every three years if they opt out
- If you are a Designated Employee please refer to the Designated Employee pages.
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 scheme 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 for an Employee joining the scheme on a voluntary basis will consist of the Employee Contributions plus an Employer Contribution if your employer has chosen to contribute to this. Your employer can choose what they want to pay when you join on a voluntary basis therefore, they could decide to pay the full amount of the secondary pension contributions, in which case you would have nothing deducted from your pay. Further information on this can be found on our How much do I need to pay? (Voluntary Employee) page.
Your employer cannot prevent you from joining the scheme or encourage you to opt out of it once you are in
- As an Employee your employer cannot ask you to leave the scheme whilst you are working for them, and they aren't allowed to offer you any incentives to leave it either. For example, they can't offer you more pay or any other rewards if you 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.
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, as you will be joining on a voluntary basis they will have up to one month to enrol you into the scheme (or 3 months after the date you last opted out, if applicable) There are several reasons why they might want to do this. For example, they may have a large number of employees to keep track of and combining all new scheme members and enrolling them at the same time might help them keep on top of any paperwork they need to complete.
- If your employer postpones enrolling you into the scheme, they must provide you with a Notice of Deferred Enrolment at least 7 days before their Operative Date, or when you will be enrolled. This is an official document, and they are required to give this to you by Law. This could be referred to in your Contract of Employment or a welcome letter so you both have a record that it has been given to you. The Notice will give you warning that you will be enrolled into a scheme and deductions will be made from your pay. It will include a section to confirm whether you want to use your employer's scheme, or Your Island Pension (YIP). If your employer has allowed you to use your own scheme, you would put the details of that one on the form instead. 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.
- Your employer is not allowed to 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 if you have concerns regarding your Contract of Employment.