PLANS to bring in statutory workplace pensions in Jersey are to be revived during the new political term, the Social Security Minister has confirmed.
Senator Elaine Millar said that moves towards a new system which would encourage Islanders to save ahead of their retirement years were one of her priorities for the next four years.
The area was being worked on by Senator Millar in 2023 during her previous stint at Social Security, only to be shelved following the change of government at the start of 2024 in favour of supporting employers in the transition to a higher level of minimum wage.
“It’s primarily about helping Islanders save for retirement,” Senator Millar told the JEP. “People are living longer, which is a good thing, and we all have some level of state pension, but that’s a basic safety net and won’t cover the lifestyle many people want for a long retirement.
“It’s something that was worked on by previous governments before I became minister [in 2022] and then we were looking to take it forward in 2023, but then it was deferred in 2024 as it was felt that the combined burden of increases to the living wage and workplace pensions would be too great for some employers.
Senator Millar, who became Treasury Minister in January 2024, said that while she understood the decision taken by her successor, Deputy Lyndsay Feltham, she now intended to have a renewed focus on the topic.
“It’s an important thing that I feel we need to do and is definitely one of my priorities,” she said. “There are similar schemes in a number of other jurisdictions and I believe it’s something that is overdue.”
The UK, the Netherlands, Switzerland and Australia are among the places where employers have a statutory duty to provide workplace pensions, while Guernsey brought in a scheme in 2024. Some schemes offer opt-outs for employees in certain circumstances.
Senator Millar said she appreciated that the matter was quite complicated and could provoke controversy in some quarters. She stressed that there would be extensive consultation on the matter before any decisions were taken over the details and start date.
It seems likely that individuals would have the opportunity to build their own pension “pot” which they would retain, and continue to grow, whenever they moved job.
While admitting that a new scheme was unlikely to be in operation prior to the next election scheduled in 2030, Senator Millar said her intention was to initiate the process at an early stage of the new administration in order that a new system could be agreed ahead of implementation by the next government soon after 2030.
During her previous spell at Social Security, the minister estimated that only around 30% of people in Jersey had an occupational or private pension plan.
Speaking to business leaders in October 2023, she said she wanted to reassure employers that extensive consultation would be carried out and that the new scheme was likely to be phased in over several years, with an opt-out option available for employees.
The issue of statutory workplace pensions, long championed by some campaigners including business consultant Kevin Keen, was raised when Deputy Susie Pinel was Social Security Minister between 2014 and 2018. After a consultation exercise, work was commissioned to develop the idea, although this process was put on hold as a result of the pandemic.
Deputy Judy Martin, who was in charge at Social Security from 2018, published the Financial Wellbeing in Old Age report shortly before the 2022 election. with workplace pension schemes among the key areas of focus.
