(CMR) The national pension holiday has received a final extension through 30 June 2022 by way of Cabinet Order, in accordance with section 1(3) of the National Pensions (Amendment) Act 2020. The Ministry of Border Control & Labour, and the Department of Labour & Pensions announced the extension recently.
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.
“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,” said Premier Hon. Wayne Panton.
“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 1 July 2022,” he added.
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 personal living expenses during the pandemic.
Deputy Premier and Minister for Labour Hon. Chris Saunders said, “The pandemic created challenges for both employees and employers and 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 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.