Lockton Global
Compliance News

Retirement

UAE

The United Arab Emirates Introduces a New Option for End of Service Benefits

The UAE cabinet recently introduced an alternative voluntary option for private sector employers to deliver the End of Service Gratuity (EOSG) to their expatriate (non-UAE or GCC National) employees in the UAE and its free zones. The new government-sanctioned option involves externally funding a gratuity savings plan through monthly contributions that would replace the lump-sum payment calculation under the existing EOSG system. This gives interested employers the ability to move to a defined contribution model and away from a defined benefit model linked to final salary.

South Africa

South Africa Proposing a Two-Pot Retirement System

The South African government has recently released draft legislation that would divide occupational retirement contributions into two pots, making one-third of the funds accessible prior to retirement and the remaining two-thirds available only at retirement or death.

The new system, known as the “two-pot” system is expected to come into effect on 1 March 2024, at the earliest—the government has proposed an implementation delay that would move all implementation dates from 2024 to 2025, but it remains to be seen whether Parliament will adopt the postponement.

Uruguay

Uruguay Passes Sweeping Pension Reforms with the Creation of a Common Pension System

The government of Uruguay has passed legislation (Law No. 20130) creating a new Common Pension System (Sistema Previsional Común) which modifies many aspects of the existing statutory pension arrangements, including increasing the state pension age, allowing retirees to continue working, and requiring greater participation in the mandatory individual account scheme. As with other countries around the world, Uruguay has recognized the rising pressure of an aging population on state-funded retirement benefits, and these modifications aim to encourage people to work longer and to reduce financial liabilities on the public system.

United Kingdom

United Kingdom Spring Budget 2023

The UK government recently announced changes in pensions, childcare, universal support scheme, and employee share plans, among others, as part of the Spring Budget 2023 to remove obstacles to participation in the workforce.

Turkey eliminates retirement age requirement [updated]

Less than six months before the Turkish presidential election, Turkish President Tayyip Erdogan recently announced in a press conference that the minimum age requirement for retirement (age 58 for women and age 60 for men) will be eliminated. This change allows more than 2 million workers to retire immediately.

The Turkish government plans to introduce and approve legislation on early retirement without meeting the age requirement in the coming weeks.

Guernsey to mandate auto-enrollment in an occupational pension scheme [updated]

The government of Guernsey recently approved a secondary pensions policy requiring the mandatory, automatic enrollment of employees into either a government-facilitated defined-contribution scheme (Your Island Pension- YIP) or a qualified, employer-sponsored pension plan.

Contributions will start at 1% for both the employer and the employee. The contribution rate will automatically increase annually until it reaches 3.5% for employers and 6.5% for employees in 2031.

France

France to reform its pension system

The French government recently introduced legislation aiming to reform the country’s pension system by gradually increasing the minimum retirement age from 62 to 64, as well as the number of years of insured employment needed to be eligible for a full pension from 42 to 43 years.  

To speed the passage of the controversial reform, the French government used its constitutional power to bypass the parliament vote. The reform is expected to enter into effect once its compliance with the French constitution is confirmed by May 2023.

Slovakia

Slovakia reforms its pension system

The Slovak government recently introduced a reform to its pension system to increase retirement savings and benefits. The reform introduces several amendments to the first pillar of the retirement program, including the introduction of a new parental pension supplement, elimination of the normal retirement age cap, and the possibility of early retirement. The reform also introduces several changes to the second pillar of the retirement program, including the automatic enrollment of first-time workers under the age of 40 and a change in the default investment option. The changes are effective 1 January 2023.

Norway

Norway extends pension scheme access

The Norwegian government passed new legislation introducing the right for all employees (including low-paid workers and part-time employees) to participate in their employer’s existing private occupational pension scheme.

The legislation entered into effect on 1 January 2022, with an adjustment period to allow for gradual implementation by 30 June 2022.

Greece

Greece to introduce a new individual retirement account system for 2022

The Greek government recently passed legislation creating a mandatory individual supplemental retirement account program known as the Hellenic Auxiliary Pensions Defined Contribution Fund (TEKA). The new funded Defined Contribution (DC) regime is intended to gradually replace the existing mandatory supplemental […]