Guernsey: Secondary Pensions: New Regulations, Statements Of Practice And Official Guidance Published

In October, the States of Guernsey passed the Secondary Pensions (Guernsey and Alderney) Regulations, 2023, and issued detailed guidance for employers and employees regarding the new secondary pensions regime. The Director of the Revenue Service also issued a Statement of Practice on Notices of Enrolment and employers' obligations.

The new Regulations confirm that the legislation will be phased in, starting with larger employees, as follows:

Employees will need to be enrolled into a pension scheme within 7 days of the employer's operative date (or within 7 days of commencing employment if later), unless either:

• the employee is already a member of a qualifying pension scheme;
• the employee chooses to opt out; or
• the employer decides to defer enrolment for up to 3 months.

Employees must be given either a Notice of Immediate Enrolment, or a Notice of Deferred Enrolment, in a prescribed form, on or before the employer's operative date (or by the start of their employment, if later). Copies of template notices are available here.

Employers who operate their own pension scheme must give employees the opportunity to be enrolled into Your Island Pension as an alternative to the Company scheme, and will need to provide sufficient information about both schemes to enable the employee to compare the two schemes.

If an employee opts out, they will need to be sent a Notice of Re-enrolment within 3 months of the three year anniversary of their decision to opt out, and if they do not opt out again they need to be enrolled into a pension scheme within 3 months and seven days of the three year anniversary of their decision to opt out.

None of the above notices need to be sent if membership of a qualifying pension scheme is compulsory under the employee's terms and conditions of employment. This means that employers who do not offer employees the right to opt out will benefit from reduced administrative requirements.

Employers will need to provide information regarding the amount of contributions paid and whether any employees have opted out to the Revenue Service on a quarterly basis.

The new guidance also confirms (amongst other things) how minimum contribution levels should be calculated and what employers' obligations are in relation to employees who do not meet the criteria for automatic enrolment. A copy of the guidance is available here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.