Below is the reply that the Association has received in response to queries that we have raised regarding the Auto Enrolment Pension. We will continue to keep members updated on this matter.
As Minister Humphreys announced in the Design Principles for the system, employees will have two opt-out options plus a savings suspension facility as follows:
It is important to note that when an employee opts-out or suspends their contributions, employer and State contributions will also cease for that period. Where an employee opts-out or suspends their contributions, they will be automatically re-enrolled after two years.
Legal advice received by the Department indicates that employer contributions are considered the personal property of the employee, as they will form part of their remuneration package. The advice also indicates that as employees who opt-out are automatically re-enrolled, a longer-term view must be taken, and that therefore the employer’s contributions should remain in the employee’s pot. Based on this advice, the Department made the decision that it is appropriate for the employer and State contributions to remain in the employee’s pot in the event that the employee opts-out or suspends contributions.