"Pensions bill does not mention tax relief for contributors", says Chamber

The private sector pensions bill came under scrutiny by the Gibraltar Chamber of Commerce with a number of suggested submissions not having been included.

A statement from the Chamber said: 

In June last year the Chamber made a number or practical and reasonable submissions to the government in response to the Command Paper for private sector pensions published in May 2018.

We note in the recently published private sector pensions bill that none of the submissions we made have been adopted or incorporated into the bill. The Chamber also notes that significant parts of the Command Paper have been cut and have not been included into the draft bill.

The draft bill has no mention of the type of pensions which will be permissible in Gibraltar. Employers and employees need the certainty that contract-based pensions including self-invested personal pensions (SIPPS) will be permitted.

No mention is made in the bill on whether the government will give tax relief to the contributions made by employers and employees. This would boost the level of saving and encourage more employees to start a personal pension.

The comment made by opposition parties that the private sector needs to offer similar conditions to those of the public sector underscores a complete detachment from the reality of the commercial world. The private sector needs to remain competitive and cannot just hike their prices at will.

All employers recognise that pension provision will become a necessary and inevitable cost of doing business. Indeed, a number of firms in the private sector already provide pensions schemes for their employees. For many though, particularly small companies, it is a question of affordability. With ever increasing business costs there will not be much left for many small businesses to invest or grow, less so to pay for the recurring costs of annual pension provision.

The points we make should not be seen as criticisms and could have been avoided if there had been at least some consultation with the Chamber or directly with members who currently provide pensions advice in Gibraltar.

The bill to provide pensions in the private sector is a significant piece of legislation and will affect all companies in the private sector. The Chamber wants to be certain that the legislation achieves what it sets out to do and does not create additional uncertainty or unnecessary costs for local employers and their staff. It is not unreasonable therefore for the Chamber to be consulted on how best to bring this about. Our members would welcome this and it would probably lead to better legislation.

The draft bill leaves too many uncertainties for employers and employees. With or without Brexit the government must engage properly with the private sector and not create laws without full and meaningful consultation.

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