New auto-enrollment pension scheme approved
by Mark Corcoran
 
Social Policy Officer with ICTU, Laura Bambrick, has welcomed the implementation but highlighted some concerns in the design.
Social Policy Officer with ICTU, Laura Bambrick, has welcomed the implementation but highlighted some concerns in the design.

Fórsa has broadly welcomed the news that Government has approved a bill to introduce a long-awaited auto-enrolment pension scheme.

 

Earlier this week social protection minister, Heather Humphreys announced details of “Final Design Principles for the Automatic Enrolment Retirement Savings System in Ireland”. The bill will now go before the Oireachtas Committee on Social Protection for Pre-Legislative scrutiny ahead of its expected introduction in early 2024.

 

Once enacted, workers will be automatically enrolled in a pension plan which will be co-funded by their employer, but can opt out if they choose. The new system is designed to simplify the pensions decision for workers and make it easier for employers to offer a workplace pension.

 

It is expected that around 750,000 people will be automatically enrolled into the system, and those enrolled will have their pension savings matched by the government and by their employer on a one-for-one basis. The State will also provide a top-up of €1 for every €3 saved by the worker.

 

ICTU social policy officer, Laura Bambrick, has welcomed the implementation but highlighted some concerns in the design.

 

“While ICTU has concerns over some of the details of the draft design of the new pension saving scheme, unions have long called for concrete action by Government to address the alarming low levels of pension coverage in the private sector and to have a legal obligation put on employers to contribute to their workers’ income in retirement, as is the case in all other OECD countries.

 

“To be clear, auto-enrolment is not a replacement for the State pension, it is intended to supplement your income from the State pension, as is the case with all other occupational pension schemes. This is especially important in Ireland where the State pension is not earnings related and so workers solely reliant on a State pension will experience a big drop in their income, and in turn their living standards, in old age,” she said.

 

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