The Government has outlined details of a new auto-enrolment occupational pension scheme targeted at workers who don’t currently have any pension provision other than the State pension.

Under the scheme, workers aged between 23 and 60, who earn more than €20,000 a year, will be automatically enrolled in the scheme unless they are already paying into a pension. Employers and the Government will pay in too.

Nearly half of workers with no occupational pension have previously indicated that the State pension would be their main source of income on retirement. It’s hoped that auto-enrolment will ensure these workers will not be left behind in their retirement years.

Employers will be obliged to match the employee contributions, while the Government will add an additional €1 for every €3 invested by the worker.

When fully established, a worker earning €35,000 per year will accumulate a fund of €293,000 over their working life, excluding investment returns.

ICTU social policy officer Laura Bambrick welcomed the progress, saying just half of workers are currently saving for their retirement. This is a particular problem in the private sector.

Implementation of the scheme has been pushed back from the end of 2023 to January 2024, and ICTU has warned against any further delay.