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FIAP > Destacados Boletines > Gibraltar: The country continues extension of Auto-Enrollment Pension Program
11 August, 2022

Gibraltar: The country continues extension of Auto-Enrollment Pension Program

Effective July 1, 2022, the British overseas territory Gibraltar expanded its auto-enrollment occupational pension program to cover private-sector employers with 101 to 250 employees. Previously, the program only covered private-sector employers with at least 251 employees, but it is gradually being extended to smaller employers until all private-sector employers are covered on July 1, 2027. The government launched the auto-enrollment program in August 2021 following the passage of the Private Sector Pensions Act 2019 to boost retirement savings among private-sector workers. According to the government, there were 23,638 private-sector workers in Gibraltar in October 2021, which represented around 78 percent of the territory’s labor force.

Other key features of the auto-enrollment program include:

  • Eligible workers: Covered employers must automatically enroll their employees in qualified occupational pension plans if the employees are aged 15 or older, have been in continuous employment for at least 1 year, and have gross annual earnings of at least £10,000 (US$12,031.44). (Individuals who work for more than one employer have each employment contract reviewed separately.) Eligible employees can choose to opt out of the program or enroll later by notifying their employers or plan administrators.
  • Program financing: Enrolled employees and their employers must each contribute at least 2 percent of weekly or monthly earnings/payroll to their occupational pension plans. (Employers can choose to pay the 2 percent minimum employee contribution on behalf of their employees.)
  • Phased implementation: The program is being rolled out in phases to give smaller employers more time to comply with financial requirements. Now that the program covers large employers (with at least 101 employees), it will be extended to medium-sized employers (with 51 to 100 employees) in July 2025, small employers (15 to 50 employees) in July 2026, and micro employers (14 employees or less) in July 2027. Existing employer-sponsored occupational pension plans can continue to operate under the new program if they meet certain minimum requirements.
  • Program governance: The Gibraltar Financial Services Commission oversees the program and maintains a register of all covered employers and their employees (including pension plan enrollees, ineligible employees, and employees who have opted out).

In addition to occupational pension plans, Gibraltar’s pension system consists of a social insurance program that provides old-age, disability, survivor, maternity, medical, work injury, and unemployment benefits. To finance the program, employees contribute 10 percent of weekly covered earnings and employers contribute 20 percent of weekly covered payroll. (Certain minimum and maximum amounts apply to employee and employer contributions.) To receive a full old-age pension (State Pension) under this program, an individual must have reached age 65 (men) or 60 (women) and have at least 2,250 (men) or 2,000 (women) weeks of contributions. A partial old-age pension is paid if an individual has reached the normal retirement age, does not qualify for a full pension, and has at least 585 (men) or 520 (women) weeks of contributions. Currently, the full monthly old-age pension is £463.75 (US$557.96), and the minimum monthly old-age pension is £120.35 (US$144.80).

Source: Social Security Administration

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