The UK introduced ‘auto-enrolment’ – a mandatory employer-sponsored pension regime – in 2012 and, almost a decade later, its implementation is regarded as a major success by both regulators and financial experts.
Previously, many workers missed out on valuable pension benefits, either because their employer didn’t offer them a pension or they didn’t apply to join their company’s pension scheme. Automatic enrolment changed this. It made it compulsory for employers to automatically enrol their eligible workers into a pension scheme. The employer must also pay money into the scheme.
Since the introduction of ‘auto-enrolment’, annual pension saving in the UK has increased by more than £7 billion and more than 10 million more people are now saving into a pension scheme. Its effect has been monitored with interest by many other jurisdictions that face similar challenges to that which the UK was facing and sought to address.
The focus has also been sharpened by the fact that the World Bank and the OECD have spoken about the sustainability of existing retirement systems and put out a call to action for countries worldwide to review their state and supplementary pension systems.
There are many places, particularly those with strong constitutional links to the UK, that are looking to implement a mandatory employer-sponsored pension regime in the coming years. These include Guernsey, Gibraltar and the Isle of Man.
Sovereign has an established presence and fully licensed pensions businesses in each of these jurisdictions and is making significant investment in terms of systems and personnel to ensure that it is well placed to provide services to employers. This area of business will complement our growing corporate international pensions and international savings plans.
For more information on Sovereign’s employer-sponsored pension solutions that we can provide from any of the above locations, please contact Sean Gillease at sgillease@sovereigngroup.com or Jo Smeed at jsmeed@sovereigngroup.com
