We note the comments from Minister Humphreys this week (reported below) that she intends to target Q4 of next year (2023) to initiate an Auto Enrolment (AE) Scheme for Pensions.
To remind members, all of your employees aged between 23 and 60 earning in excess of €20,000 p.a. will be automatically enrolled into a pension scheme with no waiting period, contributions from both you and the employee will commence at 1.5%, increasing by 1.5 percentage points every 3 years thereafter to a maximum contribution of 12% ( 6% from both contributors) at the beginning of Year 10.
There has been a flurry of activity from the Irish payroll software providers, many of whom have links with UK suppliers where AE has been in existence for over a decade. It is not possible to be any more definitive until the legislation providing for its enactment is published, we will continue to advise you on the matter.
Plans to bring in an auto-enrolment scheme for pensions will be brought to Government within weeks, Minister for Social Protection Heather Humphreys has said.
However, she said there is “a good deal of work” to do to get the scheme up and running and the target for this is the end of 2023.
The original deadline of the start of 2023 has previously been shelved due to the pressures of Covid-19 and there are doubts in the pensions industry that the scheme will happen.
Around 55 per cent of employees have supplementary pensions provision and this falls to 35 per cent in the private sector, meaning large numbers of people rely solely on the State pension for retirement income. Under auto-enrolment, an employer would be obliged to offer a pension plan to an employee, who would be automatically signed up.
At a press conference on Monday, Ms Humphreys was asked about the delay to the scheme and scepticism in the industry that it will be brought in.
“This is something that I’m totally committed to. A lot of work has been done on it,” she said. “I have already brought it to the Cabinet sub-committee and I will be bringing a full a full memo to Government in the next two weeks.”
Ms Humphreys said it will “take a while to set it up” and it will require legislation. She said “the target is by the end of 2023 it’ll be up and running” and she expects to make an announcement on this “very shortly”.