March 22, 2022
In the UK, the Government began the auto-enrolment scheme in 2012 based on the provisions laid out in the 2011 amendments to the Pensions Act (2008). Auto-enrolment duties were phased-in based on employer size, starting with large companies, followed by small and micro businesses between 2015 and 2018. This method is now assisting workplace pension savings for employees.
Gibraltar is now following suit. The 1st July 2021 saw private-sector enterprise employers with 251 employees or more implement workplace pension schemes under the Private Sector Pensions (Amendment) Act. Whilst Gibraltar may be some way behind the UK in terms of timescales, and this represents a significant change in the corporate pensions landscape. This will go a long way in supporting people who otherwise might not save enough money to live on when they retire.
From 1st July 2022, it will become compulsory for larger businesses (those with 101-250 employees) to offer workplace pension schemes and to make mandatory contributions to employees’ retirement funds. Whilst auto-enrolment may not be on the radar of many of Gibraltar’s businesses right now; it is crucial to start planning well ahead of time. There are many things on the auto-enrolment “to-do” list.
Financial protection during later years of life is critical. Gibraltar has an ageing population, many of whom are not making adequate financial provisions for their retirement. A workplace pension is one of the most important benefits you can provide as an employer. The modern workplace is undergoing rapid transformation, and many employers are looking at different ways to attract, motivate and retain the best staff. More and more people are seeking these types of benefits from their employers. Conversely, employers are starting to realise that offering a 21st-century benefits package (including a defined contribution pension scheme) can bring an advantage over their competitors when attracting top talent.
An increasing number of discerning workers with significant skill sets are seeking extra security from an employer, particularly during uncertain economic times. Much has been written and spoken about the pension situation in Gibraltar recently, and as a result, workplace pensions are now a valuable benefit.
The mandatory auto-enrolment regulations can benefit employers as well as employees. Gibraltar’s mindset is changing, as are employer attitudes. In the past, pensions have been constantly overlooked and were perceived as “boring.” Now, workplace pensions can be a crucial differentiator. Understanding employees’ values is more important than ever, particularly among the younger demographic (22-38). They are the most likely to be the first cohort to depend predominantly on their defined-contribution pension savings in retirement.
Pension rules can be complex, so it’s essential to take professional advice and guidance from those in the know, particularly regarding investments, administration and communication. At Castiel Winser, we offer pensions for every type of business. We take into account the unique characteristics of your business, including how your organisation is set up and the number of employees you have. We also consider business owners and senior management teams with unique or specific individual requirements that do not fit a group pension. We will advise you at every step, including support with legal and compliance issues, and help implement the best scheme for you and your staff.
We know that setting up a workplace pension may not be mandatory for most of Gibraltar’s businesses right now, but it certainly is good practice for all. Start your research now and find out how this can benefit both employers and employees.
If you are a smaller business looking to get ahead of the game in terms of setting up a scheme or even an individual thinking about starting a private pension, then talk to our experts at Castiel Winser today.