The introduction of the auto-enrolment pension scheme will be delayed again, according to Finance Minister Jack Chambers. The delay could extend to a number of months and has been attributed to the substantial administrative work required and the government’s intention to align its launch with other projects. Minister Chambers confirmed the delay during an appearance on RTÉ Radio One’s show, This Week.
He mentioned that the commencement date would be adjusted “only marginally,” but indicated it would likely be “a small number of months” after the initially planned date of 30 September. He explained that the timeline is “under active consideration” and that Social Protection Minister Dara Calleary will update the government on the status “in the coming weeks.”
Discussing the reasons for the postponement, Minister Chambers noted, “This is an enormous scale of administrative work which is required to bring a huge number of people within that framework quickly, and it’s just to sequence the timing aligned with other government decisions.”
He emphasized that auto-enrolment is crucial for ensuring the sustainability of pensions in the long term. The exact details of the new commencement date are currently under review by Minister Calleary.
Auto-enrolment scheme delayed again
Previously, during the scheme’s commencement announcement in October of the previous year, then-Minister Heather Humphreys stated, “We’re giving businesses a year lead-in time, because there have been concerns about further expenses on businesses.” Additionally, a delay in the replacement of the minimum wage with a living wage was signaled, with Chambers indicating that the “nature and scale” of wage increases might be “extended over a slightly longer period.” This approach was criticized by Labour’s spokesperson on workers’ rights, Senator Nessa Cosgrove, as an “ideological choice” rather than an “economic necessity.
The auto-enrolment scheme will target nearly 800,000 workers aged 23 to 60 who are employed but not enrolled in an occupational pension scheme. The scheme aims to encourage early pension savings and prevent individuals from relying solely on the State pension upon retirement.
Under the scheme, employees will contribute to their pension pot, with employers matching these contributions and an additional top-up from the State. For every €3 an employee contributes, the employer will match with €3, and the State will add €1, resulting in €7 in the employee’s pension pot for every €3 contributed. All employees who are not already in an occupational pension scheme, aged between 23 and 60, and earning over €20,000 across all their employments will be automatically enrolled.
Workers will have the option to opt out of the scheme if they wish, or to suspend their contributions after a mandatory six-month participation period.
Image Credits: Photo by Kenny Eliason on Unsplash
