Private Sector Pensions in Gibraltar

What’s new in Private Sector Pensions in Gibraltar?

Following the implementation of Gibraltar’s new “auto-enrolment” pension scheme for Gibraltar’s largest employers—so-called “Enterprise” employers with over 250 staff – on 1 August 2021, the phased roll-out moved on to the second tranche of employers—large employers with more than 100 workers—who, by 1 July 2022 needed to provide a workplace pension plan.

The Private Sector Pensions Act 2019 ensures that people living and working in Gibraltar, will be financially protected in their later years.

Like the UK’s auto-enrolment pensions regime, the Act requires all employers in Gibraltar to provide access to a workplace pension plan and the existing State pension for all eligible employees.

If an employee chooses to join the pension scheme, the Act requires both the employer and employee to make regular minimum contributions to the employee’s pension fund.

Phased Roll-out

The Act was implemented in phases to give smaller organisations more time to adjust to the new requirements.

The following deadlines were set for employer compliance under the phased implementation:

• ‘Enterprise’ employers (over 250 staff) – 1 August 2021
• ‘Large’ employers (101 to 250 staff) – 1 July 2022
• ‘Medium’ employers (51 to 100 staff) – 1 July 2025
• ‘Small’ employer (15 to 50 employees) – 1 July 2026
• ‘Micro’ employer (14 employees or less) – 1 July 2027

Enrolment

The Gibraltar Financial Services Commission (GFSC) has been selected as Pensions Commissioner under the Act to ensure that employers and those who administer pension schemes comply with the relevant requirements.

The GFSC maintains a register of employers who provide pension plans for their employees.

Employers are required to register within 90 days of the dates listed above. Employers must submit the following information:

• The documents include a copy of the pension plan and a list of employees who participated in the plan.
• Name, occupation and address of each trustee and name and address of the pension plan administrator.
• Employees’ information who are participating.
• Information regarding employees who have not elected to participate in the pension plan.
• Those employees who do not satisfy the eligibility criteria to join the pension plan, along with an explanation as to why.

Once an employer applies that the GFSC deems compliant with the Act, it has 21 days to enter the employer’s and its employees’ details onto the register.

Further Obligations

Employers must inform the GFSC of any of the following events within 30 days:

• A new employee is hired.
• Employment termination or redundancy of any employee.
• Any changes made to an employee’s terms of employment.
• A decision by an employee who had previously decided not to join a pension plan, to join the plan.

What about Spanish-Resident Workers?

The position of Spanish-resident workers in Gibraltar concerning whether the Spanish Ministry of Finance will accept contributions to their Gibraltar pension plan for Spanish tax relief purposes has yet to be clarified.

As a result, many Spanish resident workers refrain from participating in pension plans provided by their employers in Gibraltar.

During the ongoing negotiations to establish Gibraltar’s post-Brexit relationship with the European Union, hopefully this issue will be addressed.

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