Voluntary Defined Contribution Scheme
At its March 2019 sitting, Tynwald considered the Cabinet Office Report entitled 'Public Sector Pensions - Legacy Funding Update: A Second Cabinet Office Report (GD 2019/0014) (The Report)'.
One of the recommendations that Tynwald approved was to direct the PSPA to:
'establish a voluntary Defined Contribution pension scheme by 31 December 2020, as an alternative to the current Defined Benefits Schemes following an assessment with Treasury of the possible cost implications on the current schemes, and that if implemented, it will be offered to all future new public servants and also, (subject to cost implications) to any current public servants who wish to move into that scheme'.
The PSPA has commenced its work to introduce a new public sector pension arrangement to be available to new employees in 2022. Work continues and it is anticipated that the new arrangement will be available to new employees in the next few months.
The new arrangement is an Aviva Group Personal Pension Plan and will be offered as an alternative option to membership of the current defined benefits pension schemes, namely the Isle of Man Government Unified Scheme 2011, The Teachers Superannuation Order 2011 and the Police Pension Regulations 1991 and 2010. The default option for those new employees who do not make an active choice will be the relevant current defined benefits scheme to their employment.
The provisions of the DC Arrangement will be established under an IOM Government Policy. In brief these are:
The contribution structure will be a 2:1 (employer to employee) matched contribution structure with a maximum level of 15%:7.5%.
All employees who are new public sector employees can join. There are restrictions to joining, public service pensioners returning to a post retirement employment, employees already employed in another public sector employment and employees who have left service and started a new employment without a break of 31 days will not be permitted to join.
This is 'basic pay' only.
The arrangement offers a 'default fund' and for those who wish to make their own investment choices an additional range of individual investment funds will be available.
Last updated: April 2022