Draft law on private sector pensions stalls as GSD calls for more time
A debate on “seminal” legislation to ensure pensions for private sector workers stalled in Parliament yesterday after the GSD delayed the process in a bid to secure more time to assess the draft law in detail.
Once approved, the legislation will ensure private sector companies are obliged to offer pension plans to their workers.
The Bill was due to have been passed by Parliament yesterday but GSD MPs voted against taking the final committee and third reading stages, in a move that delayed the process and drew flak from Chief Minister Fabian Picardo.
The GSD said it supported the Bill in principle but insisted it was a complex piece of legislation which required further scrutiny.
Setting out the party’s contentions with respect to the Bill, GSD MP Roy Clinton said that sections had been cut from the previously published Command Paper on the topic.
He said there was no great urgency in passing the Bill as its provisions did not commence until 2021, and insisted that the legislation needed thorough examination by the House and feedback from all relevant stakeholders.
“We have to get the detail right,” he said.
Mr Clinton called on the House to put the Bill to a Select Committee for those purposes and was defeated by Government majority. Independent MP Marlene Hassan Nahon also voted against putting the Bill to a Select Committee.
The Bill will be heard at a subsequent, yet-to-be-determined date.
Mr Picardo accused Mr Clinton of “conning” the House and “conning” working people into thinking that there was a good reason for delaying the passage of the Bill through Parliament.
“This is a mechanism to seek to delay a Bill that is designed to create rights for working people in our economy,” he said.
The Bill was supported by Ms Hassan Nahon who, nonetheless, called on the Government to make further provision for the current demographic of private sector pensioners.
The Bill provides that, should an employee choose to participate in a pension plan, the law will require the employer to contribute towards that employee’s pension plan.
Employers in the private sector will therefore have an obligation to provide a pension to employees.
The Bill sets out the minimum that will be required from employers in the private sector; although any employer wishing to do more – as many already do - can, at any point, increase their contributions.
In presenting the Bill to the House yesterday, Mr Picardo said that with the Bill, the Government is ensuring that every member of the community, even those in the private sector, are protected financially in their later years.
“By ensuring that everyone has a pension plan, an individual can then contribute more to that pension plan,” he said.
The implementation of the proposed law is phased so that smaller employers have more time to deal with the requirements and have a longer period to make the requisite adjustments.
Large employers will be required to comply with the provisions of the Act by July 2021, medium employers will be required to contribute by July 2022, small employers by July 2025 and micro employers by 2027.
The definitions of whether the employer is small/medium or large will follow the definition in the Companies Act 2014, with the requisite changes so that the definitions also apply to employers who are not companies.
The draft law envisages that workers on lower incomes will be able to contribute to a pension plan to be established by the Government.
Workers will be free to choose not to participate in a pension scheme but there will be a duty on employers to notify the Pensions Commissioner if the employee would like to participate in a pension scheme or otherwise.
If the employee chooses not to participate, there is a relevant form for that employee to fill in.
Workers will be entitled to take the benefit of this law once they are 15 years of age, they are earning at least £10,000 per annum, and must have been employed by that employer for a year.