Will auto enrolment impact you?

Auto Enrolment: The Pension Paradigm Shift

Auto enrolment – a beacon of hope for Ireland’s pension future. Will it touch your life? The truth is, specifics are still unfolding. But here’s our insight so far.

The Background: Only 35% of private sector workers have pensions. Alarming, considering the state pension is meagre at €265.30/week. Add to this the impending demographic challenge – fewer workers funding more pensioners.

What’s Auto Enrolment? Proposed by the Department of Social Protection, it aims to curb this crisis. All employees would be enrolled in a pension, co-funded by them, employers, and the state. Inertia would drive participation, boosting pension coverage.

The Catch: Lack of clarity. A legislative revamp is underway. Implementation delays loom, with details like entry ages, salary thresholds, and investment options up in the air.

The Journey Ahead: Building the auto enrolment system takes time. Committee recommendations propose a two-year prep period for businesses before actual enrolments commence.

Will It Affect You? Already pension-ready? Not much impact. No retirement fund? Brace yourself. While your take-home pay might dip due to contributions, remember: employer and state contributions counterbalance, and could you thrive on €265.30/week?

Sources:
• RTE News: Private Sector Pensions – March 2022
• Irish Times: Committee Advises Auto Enrolment – May 2023