The legislation makes it mandatory for employers to auto-enrol all employees in a qualifying scheme, although they do then have the right to opt out.
As part of the scheme the States arranged for a default pension scheme to be made available to employers.
That scheme is known as Your Island Pension, and is operated by local pension provider Sovereign.
Over the past two years more than 4,500 people, employed across more than 1,000 local businesses, have joined the YIP, as it is known, with funds under management now totalling just less than £9m.
But as the YIP is only one of the options open to employers under the law, it is likely that the total number of new savers enrolled in occupational pension schemes as a result of the legislation is significantly higher.
‘I’m very pleased with the progress that has been made. Secondary pensions is a long-term reform, so its real success will only become clear over many years, but the initial roll-out has been broadly positive,’ said Employment & Social Security Committee president Tina Bury.
‘YIP has ensured that employers have access to an affordable scheme, and the wider policy is helping more islanders save for retirement.
‘At this stage, I believe the foundations have been successfully laid and, while there will always be lessons to learn and improvements to make, the policy is moving Guernsey towards a future where more people can look forward to a more comfortable and financially independent retirement.
‘Ultimately, the aim is to reduce pensioner poverty and improve financial security in later life, and I believe we are on the right track.’
ESS said it was not yet in a position to publish the total number of new savers since the law came into effect, but hoped to be able to do so by the end of this year.
As at 1 July the number of YIP savers was 4,522, drawn from 1,009 different employers.
Estimates provided by Sovereign have revealed that an employee earning £40,000 a year, who joined the YIP two years ago, and is making the minimum permitted contributions into the scheme, will now have a pension pot of about £1,863.
However, their level of savings will accelerate over the years ahead, both because their minimum contributions as set out in the law will rise over time, and because they will benefit from investment returns on a bigger pensions pot.
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