Today, Cabinet decided to extend the pensions holiday until the 30th of September 2022. Cabinet’s decision to extend the temporary break in the legal requirement for contributions to employees’ pension plans, aims to reduce the impact of the current global inflationary crisis on local businesses and individuals. The Ministry will be issuing the associated press release which will be posted on its website and updating our communication to convey this information to the general public.
“While it has been helpful to individuals and businesses to suspend the pension requirement during the past two years, we are now at a point in time where it is in the best interest of employees, to resume the funding of their pensions. It is the responsible approach to adopt given the improving economic environment and the Government is providing advance notice of this to allow employees and businesses to prepare for the resumption of these payments starting July 1st, 2022,” said Premier Hon. Wayne Panton.
The pension holiday, in place since April 2020 as a COVID-19 relief measure, exempted employers, employees, and self-employed individuals from making mandatory contributions to pension plans.
The rationale behind the pension holiday was that companies would have had more cash available to cover expenses such as payroll and health insurance contributions while employees would have more funds available to assist with their individual living expenses during the pandemic.
Deputy Premier and Minister for Labour Hon. Chris Saunders said, “The pandemic created challenges for both employees and employers as well as those currently seeking employment. With the relaxation of some travel restrictions, the resumption of commercial airline flights and the upcoming reintroduction of cruise tourism, the decision to extend the pension holiday for another three months was made to allow additional time for businesses to grow to full strength as the country reopens.”
As with the previous pension holiday periods, Government Owned Companies and Statutory Authorities are excluded from the Order, and therefore must continue to make pension contributions to their respective plans.
The Department of Labour & Pensions reminds the public that voluntary pension contributions can be paid into pension funds. Either the employee or the employer may opt to pay voluntary pension contributions, however, the other party is not required to contribute as well.
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