The Irish Association of Pension Funds (IAPF) has called on the Government to either concede that it will not be in a position to start the landmark auto-enrolment (AE) pension scheme next year — or confirm “with absolute certainty” a date for when it will commence.
The lobby group made the call in a submission in advance of Budget 2025 being unveiled on October 1st.
The Department of Social Protection is targeting a start of the scheme, aimed at capturing 750,000 workers without an occupational or private pension plan in “early 2025″, following a series of delays.
“The IAPF is supportive of the concept of automatic enrolment and we believe it is important that it is introduced as soon as possible in order to help improve pensions coverage in Ireland,” the IAPF, led by chief executive Jerry Moriarty, said in the submission. “It is disappointing that the roll-out of auto-enrolment has been consistently delayed with very few of the milestones set out being met.”
‘Our elderly mum requires full-time care at home. How much will it cost us and is there any tax relief?’
Cities need to be run in new ways, and not just by officials, or councillors, says former British mayor
Recent deals shine spotlight on Ireland’s buoyant M&A market
Five things we’ve learned about the Irish economy in the last few days
The organisation said it is “hard to see” that AE will commence in early 2025.
“We believe it would be helpful for the ultimate success of auto-enrolment if it was confirmed in the budget that auto-enrolment will not commence in 2025 — or confirm with absolute certainty the date it will commence in 2025, and that a firm date will only be confirmed when a deliverable plan for all the outstanding issues has been agreed,” it said.
The department confirmed in July that it had selected Indian information technology company Tata Consultancy Services as its preferred partner to build and run the AE system after enabling legislation for the scheme passed its final stage in the Oireachtas.
Could office construction in Dublin soon come to a full stop?
However, there is a widespread view that AE — which was first proposed in 2006 by then Fianna Fáil minister for social and family affairs Séamus Brennan — will not be up and running in early 2025.
A State agency that will oversee AE has yet to be set up and staffed and the department still has not begun the formal search for asset management firms to manage the underlying investments.
The IAPF also highlighted that a comprehensive communications strategy will be needed to educate employers and workers on the scheme as well as detailed engagement with payroll providers to implement and test necessary changes to software systems.
AE is set to apply to workers aged between 23 and 60 earning at least €20,000 annually and who are not already members of occupational schemes.
Under the AE plan, workers and their employers will each initially pay 1.5 per cent of a person’s gross salary into the scheme. From year four, that will increase to 3 per cent, rising again to 4.5 per cent in year seven and 6 per cent from year 10.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
