New Workplace Pension Scheme for Ireland – Minister Humphreys announces details of Automatic Enrolment Retirement Savings System

Ireland is the only OECD country that doesn’t yet operate an Auto Enrolment or similar system as a means of promoting pension savings. The new system is designed to simplify the pensions decision for workers and make it easier for employers to offer a workplace pension.

• approximately 750,000 workers to be enrolled into a new workplace pension scheme
• participation in the new scheme will be voluntary – workers will have the ability to opt-out
• scheme includes matching employer contributions and a State Top-up
• for every €3 saved by a worker, a further €4 will be credited to their pension savings account- the employer will match the employee contribution and the State will also top up contributions by €1 for every €3 saved by the employee, up to a maximum of €80,000 of earnings.
• employees will have a range of four retirement savings funds to choose from

 

Phased implementation

• all employees not already in an occupational pension scheme, aged between 23 and 60 and earning over €20,000 across all of their employments, will be automatically enrolled

 

• with the system set up by 2023 for employee enrolments in 2024, the introduction of Auto Enrolment will be very gradually phased in over a decade, with both employer and employee contributions starting at 1.5%. This steady phasing allows time for both employers and employees to adjust to the new system

Years	Employee (as % of salary)	Employer (as % of salary)	State (as % of salary)	Total (as % of salary)
1-3	1.5%	1.5%	0.5%	3.5%
4-6	3%	3%	1%	7%
7-9	4.5%	4.5%	1.5%	10.5%
10 +	6%	6%	2%	14%

 

Sage Payroll already provides for Employee and Employer pension contributions in Salary computations and will be updated for Auto Enrolment once the details has been published in legislation.