Mandatory workplace pensions priority for minister

Introducing mandatory pensions in the workplace is a priority this political term, Jersey's social security minister has said.

The government shelved plans to introduce statutory workplace pensions in 2024 as it said forcing businesses to provide schemes could jeopardise efforts to implement a living wage at that time.

Jersey Chamber of Commerce said many businesses already provided workplace pensions, but for those which did not it could have a significant impact; and Unite the Union supported the introduction of the schemes in Jersey.

Senator Elaine Millar said work on the scheme never "really went away" but other work was prioritised instead.

She said: "What I would like to do is try and create a scheme that is cost efficient, effective and works very simply, designed for Jersey, that enables people to save for their own retirement because while the state's pension is there, it is just a safety net.

"A lot of our neighbouring countries, the UK, Guernsey, they have those schemes already and I think it's useful that we look at them, we learn from them, but design something that works for Jersey."

Millar said if the government did not act now, the island was "potentially looking at a future where everybody is having to pay more tax to provide funding to pensioners who cannot afford to live in the island".

She added: "The more we can do to help people to be financially independent, and employers will play a part in that I expect, as they do in other countries."

The social security minister said most pension schemes were "not designed to replicate a working wage" and implementing a statutory workplace pension would make it "easier for people to save through their working lives" so they could "make their lives better when they do retire".

Jersey Chamber of Commerce said it was happy to assist in any consultations with the government and that any financial burden on employers "must be considered very carefully".

It said any mandatory employer contribution could have "a significant impact" if it wasn't already provided.

"Members are already nervous about the cumulative burden of rising employment costs, including a 63% increase in the minimum wage over six years, new family friendly provisions, changes to discrimination legislation and additional tribunal costs."

Unite the Union said it was necessary for the government to push forward with a mandatory scheme.

It said: "The majority of our members in the island already contribute to such pensions linked to their employment and then enjoy the benefit of additional financial resilience in their retirement.

"With ever increasing costs of living it would be a concern if local government do not introduce such minimum standards as the UK and Guernsey already have, this is long overdue in Jersey."

Millar said she aimed to have legislation in place by the end of her four years in the current political term, 2030, but hoped it could be started as soon as possible.

"I suspect the reality is that if I can get the legislation in so that it can be turned on in the early years of the next term, I think that's a reasonably realistic timescale."

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