Auto-enrolment deadline looks as unrealistic as ever

The first concrete signs of activity in delivering the long-promised mandatory workplace private pension scheme — auto-enrolment — emerged this week with news that the Department of Social Protection is finally ready, or will be later this month, to officially kick-start its search for a company to build and run the system over the next 10 years.

Mind you, no contract is likely to be awarded until some time in the first half of next year. And the legislation to underpin the new scheme that will automatically sign all workers between the ages of 23 and 60 earning more than €20,000 a year has yet to be published, never mind pass through the Oireachtas.

Recruitment to a new State agency — the Central Processing Authority — which will oversee auto-enrolment also remains on the “to-do” list, alongside a necessarily extensive communications campaign to explain the concept to those affected.

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All of which makes the department’s continued insistence that “employers should prepare for the introduction of auto-enrolment in the second half of 2024” seem somewhat far-fetched.

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Excel Recruitment boss Shane McLave is far from alone when he described it as “an incredibly ambitious, if not impossible timescale, considering the level of work involved and the number of stakeholders that are required to buy in”.

McLave has been paying close attention to developments as his company works with hundreds of larger employers in the hospitality and retail sectors, whose employees are most likely to be signed up to auto-enrolment.

“With no sign of a tender process having commenced and appreciating that initiatives of this scale can take months if not years to build, test, and roll out, it’s difficult to see how this could all be done within 12 months as is suggested. A timescale of 24 months would be more typical of such endeavours,” he says.

A glance at our neighbours in the UK is instructive: it took them more than five years to get from establishing the overseeing authority (our yet-to-be-established Central Processing Authority) to starting to enrol workers into their scheme.

“There are a lot of moving parts to this — most of which have yet to even get started. We are also expecting an election in late 2024 or early 2025,” the Excel managing director concludes. “In light of this and other factors, early 2026 seems like a far more realistic expectation for the successful rollout of auto-enrolment.”

It’s hard to disagree.