The Irish Government is introducing a new auto-enrolment pensions savings scheme in 2024. This initiative aims to ensure that every worker has access to a workplace pension in addition to the basic state pension. The scheme is designed to make workplace pensions more appealing to employers and simplify decision-making for employees.
What is the Auto-Enrolment Scheme?
It’s a pension investment program where employers top up employee contributions with a set percentage of their gross income. Ireland is currently the only OECD country without such a system.
Scheme Objectives: Increase active participation in supplementary pension provision from the current 35% to over 70%.
Scheme Commencement: Expected to start in Q1 2024.
Eligibility: Automatic enrolment for individuals earning over €20,000 annually, aged between 23 and 60, and without an existing pension plan.
Contribution Levels: Initial contributions: 1.5% each from employer and employee, plus 0.5% from the state. This will increase every three years, reaching a total of 14% by the 10th year.
Opting Out: Employees can opt out after six months of joining and after each tri-annual increase within a two-month window.
Choice of Plan: Employees can choose from various retirement savings fund options.
Job Changes: Employees can carry their “retirement pot” with them when switching jobs.
Investment Options: Funds will be invested in equities, property, bonds, and commodities, with four different fund options.
Central Processing Authority (CPA):The CPA will manage the system, and employers will be responsible for calculating and paying the employee’s contribution to the CPA.
Get in touch: For more information on what is the best pension plan for you please get in touch. I will thoroughly examine your current financial situation and where necessary, offer suggestions for improvement.