Smart Pension Ltd to operate States secondary scheme

It is one of the major spending commitments being considered by the States, with a bill that will reach £9m. a year in 2029.

Yesterday, Employment & Social Security gave a presentation to employers about the proposals, due to be published before the end of the year to be debated in 2020.

They will require all employers to make workplace pension arrangements for their staff.

The scheme has been in development since 2016.

‘The proposals are a major measure in ensuring the island is not faced with a serious “pensioner poverty” problem,’ an ESS spokesman said.

‘They include the establishment of a States-facilitated pension scheme to ensure that every employer has access to an affordable and easy-to-use pension scheme.’

It is based on the UK’s auto-enrolment system, which has resulted in 10m. more people saving into a pension scheme.

‘The Guernsey scheme will be called Your Island Pension (YIP). ESS is proposing Smart Pension Ltd to act as administrator and operate the scheme.’

‘Smart Pension will be operating a digital platform meaning scheme members can engage with their pension through a cutting-edge app.’

More details on the scheme and how it will operate will be included when the full proposals are published.

The delay in introducing a secondary pension will have knock-on effects to the policy for increasing the States pension, according to Policy & Resources’ review of spending guidelines, which will be debated next month.

Currently the pension is increased by one-third of the real (above inflation) increase in median earnings and from 2025 the intention was that this would be reduced to increasing it by RPIX, which excludes mortgage interest payments.