Ireland Set to Introduce Auto Enrollment Pension Scheme Benefiting 700,000 Employees
Dublin: In a significant move for Ireland, the government is poised to launch the Auto Enrollment Pension Scheme this year, targeting approximately 700,000 employees currently outside existing pension programs. Collaborative efforts between employers and the government will drive the implementation of this groundbreaking pension initiative.
Currently, only 35 percent of private sector employees in the country enjoy pension benefits, leaving a substantial portion without coverage. The Minister of Social Protection has hailed the auto-entitlement pension scheme as the most substantial change in the nation’s history to address this disparity.
Outlined Framework
In the initial three years, both workers and employers will contribute 1.5 percent of the employee’s salary to the scheme. Subsequently, this contribution will escalate to three percent in the fourth year, reaching 4.5 percent in the seventh year, and culminating at six percent from the tenth year onward. Employers are committed to matching the contributions made by employees, ensuring parity in financial participation.
The Auto Entitlement Bill is scheduled for publication in March, followed by parliamentary committee review. The Minister has expressed a commitment to expeditiously navigate the legislative process through both the Dail and the Senate.
Long-Awaited Implementation
This marks the realization of a project envisioned over the past 18 years, encountering delays despite previous announcements. Initially anticipated for mid-November implementation, the draft legislation’s publication by the end of 2023 did not materialise, with no allocation in the October budget.
Advancement Despite Concerns
Acknowledging employer concerns regarding the financial implications of the new pension scheme, the Minister reassured that the implementation timeline remains unaffected. Progress is evident in the ongoing tender process for the Pension Administrative Service, with pre-qualification completed and a shortlist in place. The Minister remains steadfast in the commitment to see through this transformative pension initiative without undue delay.
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