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Govt urged to introduce pension auto-enrolment ‘as quickly as possible’
The Pensions Authority is expected to tell the Oireachtas Committee on Social Protection today that the Government should introduce pension automatic enrolment as quickly as possible.
In October, details of the new auto-enrolment scheme were approved ahead of its expected introduction in 2024.
Workers aged between 23 and 60 will be automatically signed up to a pension plan co-funded by their employer and the State but they can opt out if they wish to leave.
The plan is for employees who are not already in an occupational pension scheme.
Workers will have their pension savings matched on a one-for-one basis by their employer. The State will also provide a top-up of €1 for every €3 saved by the worker.
The bill introducing the pension scheme is currently before the committee for pre-legislative scrutiny and members will hear from the Pensions Authority today.
“As a result of the voluntary nature of occupational pension provision, pension coverage in Ireland is low,” Dr David Begg, Chairperson of the Pensions Authority is expected to tell members.
“By far the greatest predictor of whether a worker will have a pension or not is if their employer offers one.”
“Therefore, in our view, it is vitally important that Government enacts this legislation and introduces automatic enrolment as quickly as possible to ensure that the pension coverage rate in Ireland increases,” Dr Begg is expected to say.
Pension provider Irish Life is also due to address today’s hearing.
Representatives are expected to say that while they welcome the introduction of pension auto-enrolment they have concerns about the scheme.
Committee members are expected to hear that if issues with the proposals are not addressed it could exacerbate the pensions gender gap.
Irish Life is also expected to raise concerns about lower levels of protections and rights for auto-enrolment members, and highlight uncertainties over how members will access their money in the future.
Speaking ahead of today’s meeting, Committee Cathaoirleach Deputy Denis Naughten said the disparity between workers in the private and public sector and projections for an increasingly ageing population mean many people will face a lower standard of living once they retire.
“Successive reports have recommended automatic enrolment as a means to ensure greater pension coverage among workers,” Mr Naughten said.
“We look forward to discussing these and other related matters with representatives,” he added.
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