The goal of introducing introduce a pension auto-enrolment scheme has received general support. Ireland has a problem in the large number of people within any private pension provision and this is one way to improve the situation. However despite the fact that this has been under discussion for many years, it looks likely that the target of introducing such a scheme early next year will be missed.
The Government has yet to formally concede this, but briefing papers for Minister for Finance Michael McGrath from officials refers to the target as " somewhat ambitious.” Ibec, the employers’ group, has said that businesses will not be ready and there are significant doubts about whether a proposed State-run Central Processing Authority can be up and running in time.Draft legislation has not yet been published though is promised from the Department of Social Protection early this year.
Pensions auto-enrolment is a significant policy change, likely to affect some 750,000 employees who do not currently have any private pension provision, many of them lower paid. It would oblige employers to sign up all employees earning over ¤20,000 to a pension scheme, though they could then opt out if they wished. The idea is that this would lead to a much greater level of pensions coverage and leave fewer people at retirement age reliant solely on the State pension. Given the increasing numbers of people renting, rather than owning, a home this becomes even more important. More people will reach retirement without the asset which home ownership affords.
There remain some questions about the proposed scheme. The Central Processing Authority would take considerable time to establish and there is also discussion about the proposed age and income limit and contribution levels.
It is also vital that the scheme offers the best possible deal to the public both during their working life and after retirement – and that costs at all stages be kept as low as possible.
The beneficiaries must be the public, not the financial services sector.