Minister for Social Protection Heather Humphreys says she will “shortly” begin the search for investment firms to manage assets under auto-enrolment (AE) after she this week signs a commencement order that will see the long-delayed mandatory workplace pension scheme begin operations at the end of September next year.
The Minister has also secured Government approval for the establishment of a National Automatic Enrolment Retirement Savings Authority at the end of March. Her officials will now begin work to recruit for the board and staff positions.
Auto-enrolment, which aims to capture 800,000 workers in the State who do not currently have an occupational or private pension plan, will be known as My Future Fund.
“Auto-enrolment has been talked about for 30 years: in 2025 it will become a reality,” Ms Humphreys said. “Setting a start date a year from now gives all stakeholders involved, including employees, their employers, payroll developers and providers, time to make the necessary preparations and adjustments to their systems and their processes to facilitate the implementation of AE and to budget accordingly.”
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Ms Humphreys first disclosed the September 2025 date last weekend in what has been something of a stop-start process over the years. Most recently she had been targeting a start of “early 2025″.
Her officials aims to select four investment management companies to invest contributions from employees, employers and the State. The investment managers will provide three strategies: a higher risk, medium risk and lower risk strategy. All participants will be placed in a default strategy if they do not choose a specific one.
The department said it has now signed up Indian group Tata Consultancy Services, which has a base in Letterkenny, Co Donegal, employing 1,400 people, to build and run the auto-enrolment system for the next 15 years at a cost of €150 million. Tata, which was selected as preferred bidder in June, administers a similar system in the UK.
Under the terms of the Irish scheme, which applies to workers aged between 23 and 60 who earn at least €20,000 per annum across one or more jobs, employers and employees will each initially contribute 1.5 per cent of gross earnings to their pension pot, with the government adding a further 0.5 per cent. The contributions are due to increase in stages, reaching 6 per cent, 6 per cent and 2 per cent respectively in 2035
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