Smart Pension has been appointed as the preferred provider for Guernsey’s new auto-enrolled pension scheme.
All employees living and working in Guernsey will be enrolled into the Your Island Pension Scheme in 2020, once the legislation has been fully ratified by the island’s parliament.
Deputy Michelle Le Clerc, president of the States of Guernsey committee for employment and social security said that Smart Pension’s “cutting edge” approach to technology had helped them win this tender.
She adds: “We’re confident that Your Island Pension will change the pension landscape in Guernsey, ensuring every Islander has access to a product which is affordable but doesn’t compromise on service standards.”
Although very similar to auto enrolment in the UK, Your Island Pension will be a single private scheme, overseen by the State’s Committee for Employment and Social Security.
Under the new secondary pension legislation employees will have the ability to opt out, and like the UK, there will be an obligation on the employer to re-enrol employees every three years.
Employers will be required to contribute at a minimum level into this pension scheme, or a private qualifying scheme. Contributions will start at 1 per cent and increase to 3.5 per cent over a nine year period so that by 2030, all employers will be required to contribute 3.5 per cent.
Employees will also start by paying in 1 per cent increasing to 6.5 per cent over the nine years.
Smart Pension co-founder and chief executive Andrew Evans says: “The introduction of auto enrolment in the UK has transformed the retirement savings culture for workers and undoubtedly it will have the same impact in Guernsey.
“The fact that employees will make contributions from their very first pound of earnings shows the commitment that the States of Guernsey has to deliver a better retirement outcome for their residents. This element will undoubtedly be closely observed by the UK Government as it evolves.
“Your Island Pension savers will all benefit from Smart’s unrivalled savings and investment technology including an app which will display their savings balance in real time on their smartphones.”
The scheme is expected to launch in the first quarter of 2022. Those who already pay into a private pension or Retirement Annuity Trust Scheme will not be required to pay into a new scheme as well, provided that this scheme meets the qualification criteria.