Auto Enrolment Retirement Savings System
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.