General Secretary of the Irish Congress of Trade Unions (ICTU) Owen Reidy has called on Government to act and implement the Automatic Enrolment Retirement Savings System Bill as a matter of urgency. 

Speaking ahead the commencement of the Dáil debate on the Bill earlier this month, Owen called on politicians from all parties and none to “get the bill done.”

“Another generation of workers cannot be allowed to have their income and living standards plummet in retirement. It is vital that 2024 is the year when we get the pension auto-enrolment bill done and finally bring an end to our failed voluntary approach to pensions saving. It is long overdue. Ireland remains the only OECD country not to operate auto-enrolment or similar pensions saving scheme,” he said.

By law, employers are required to provide their employees with access to a personal retirement savings account (PRSA) if they do not provide an occupational pension scheme for their employees. There is no obligation on the employer to make a contribution. 

The latest Pensions Authority activity figures show a decline in the number of workers with an occupational pension, at a time when more people are in employment than ever before. A recent CSO report on pension coverage shows that 1 in 20 employees with a pension had a PRSA only.
 
“Given that the State pension is paid at a flat €277.30 a week, workers without the income top-up from retirement savings - two-thirds of today’s private sector workers - are exposed to a significant drop in their normal living standards in old age,” he continued. 

The ICTU General Secretary remarked that the introduction of auto-enrolment in the UK in 2012 has been an extraordinary policy success, as the proportion of employees with a workplace pension has jumped from 47% to almost 80%.

“We welcome the provisions in the Bill for a worker representative on the board and to consider expanding auto-enrolment to younger, lower paid and self-employed workers and death in service cover - all of which Congress called for at pre-legislative stage – within five years of automatic enrolment coming into operation for the first 800,000 eligible employees.”

“But we strongly call for the seven-year deadline provided for in the Bill for setting minimum contribution rates into existing pension schemes to be shortened. It will be a bitter pill to swallow for workers who find themselves with a lower or, in cases of personal pensions, no employer contribution all because they had proactively taken steps to save for their retirement prior to auto-enrolment,” he said. 

Mr Reidy said that politicians have been talking about introducing a mandatory pay-related pensions saving scheme for “longer than they have been talking about the pension age.”

“Now that we are finally within touching distance of making a meaningful difference to hard-working people’s retirement, it is imperative that all politicians work together to get the legislation passed,” he said. 

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