• Search
  • Newsletters
  • Crossword
  • Notices
  • My Account
  • Subscribe
  • Sign In
The Irish Times
Mon, Jan 18, 2021

  • The Irish Times
  • News
  • Sport
  • Business
  • Opinion
  • Life & Style
  • Culture
  • More
  • Video
  • Podcasts
  • Executive Jobs
  • Search
  • Subscribe
  • My Account
  • Sign In
  • Zurich Pensions Investments
Sponsored content is premium paid-for content produced by The Irish Times Content Studio on behalf of commercial clients. The Irish Times newsroom or other editorial departments are not involved in the production of Sponsored content.

Auto enrolment could prove a highly effective retirement savings initiative

If introduced to Ireland, auto enrolment would be the latest in a number of initiatives designed to bring more people under the pension umbrella and boost retirement savings

Wed, Sep 27, 2017, 06:00 Updated: Wed, Sep 27, 2017, 11:14
Sponsored by Zurich
Zurich

Rose Leonard: “The aim is that every worker would have an opportunity to be in a pension scheme. Most other countries have some kind of auto enrolment initiative, including the UK, Australia, New Zealand and the US.” Photograph: Zurich

   
 
 

Auto enrolment for pensions might seem like a radically new idea but in fact, it’s not new at all.The idea behind auto enrolment is that every worker would automatically be enrolled in a pension scheme by their employer. Driven by a mounting need to boost pension coverage, the thinking is that it’s more effective to let people opt out of a pension, rather than continue hoping they will opt in.

Certainly, this has already proved to be the case in countries such as Australia and the UK. It hit the headlines here in the past year when Taoiseach, Leo Varadkar, back when he was minister for social protection, said he was in favour of a universal retirement scheme whereby members were automatically enrolled. The Taoiseach returned to this subject in September when speaking to the employers' group IBEC, where he reiterated his proposal to introduce automatic enrolment as part of the Government's national pension plan.

But the fact is, you only have to go back half a generation to find that whole swathes of workers were – and indeed many still are – effectively "auto enrolled" in the occupational pension scheme run by their employer.

“When I started out, anyone getting a job in a bank, an insurance company or a big employer would automatically be enrolled in the occupational pension scheme,” says Rose Leonard, head of distribution and customer relationship management at Zurich Life.

Rose Leonard, head of distribution and customer relationship management at Zurich Life
Rose Leonard, head of distribution and customer relationship management at Zurich Life

Today, the idea is that auto enrolment will be aimed at those employers that don’t have an occupational pension scheme or, if they do, for those employees who, for a variety of eligibility reasons – such as, perhaps age or length of service – aren’t in it.

“The aim is that every worker would have an opportunity to be in a pension scheme. Most other countries have some kind of auto enrolment initiative, including the UK, Australia, New Zealand and the US,” says Leonard.These are proving highly effective at bringing people under the pension umbrella – retirement savings being the epitome of the ‘rainy day fund’.

If introduced, it would be just the latest in a number of initiatives designed to boost retirement savings in Ireland. These began with changes introduced by Pensions Acts in the early 1990s which introduced greater flexibility in relation to annuities. More recently the advent of personal retirement savings accounts (PRSAs) have allowed for greater portability of a pension from job to job.

“Unfortunately, PRSAs weren’t successful in so far as they  did not increase the number of people saving overall,” says Leonard.

Lack of pension coverage is a huge problem in Ireland. While public sector workers are automatically entitled to a pension, only one third of private sector workers are thought to be in a pension scheme*. And of the one third that are, very many are not contributing enough, she says.

“Public sector workers are auto enrolled and, indeed, in our parents’ generation auto enrolment was effectively the norm. In those days, when the job for life was prevalent, people would often have 40 years’ service with the one employer,” says Leonard. In the private sector, today’s workforce entrants, from Millennials down, are typically characterised by mobility and job change, often with gaps in service in between.

The notion of the ‘permanent and pensionable’ job was itself retired and, with the loss of the ‘job for life’, increasingly unobtainable. 

“People’s mindsets changed,” says Leonard. “Before, our parents would have told us to go for the good, secure, pensionable job. Now employees are more mobile, and an unintended consequence of that is that no one is thinking long term about financial provision for retirement.”

Equally, “years ago, 40 years of service was the norm. Now people talk about retiring earlier, sometimes in their 50s rather than at 65. But they are more likely to start later too. It could be your mid 20s before you are out of college, whereas in previous generations it wouldn’t have been unusual to go in to employment at 16.”

This may explain why, according to Central Statistics Office household survey figures for 2015, pension coverage here is actually falling. It indicates that nearly half of all workers across public and private sectors (47 per cent) had a pension in Q4 2015 - down from 54 per cent in Q1 2008. The recession no doubt took a toll, discouraging people from starting a pension. In other cases it may have encouraged those who were eligible, to clear out their pension pots, particularly if they were made redundant and aged over 50.

For the two thirds of private sector workers who have no pension provision at all, things are particularly bleak, with the State pension best described as a safety net against poverty.

And, with an estimated 17,000 more people depending on the State pension each year thanks to our ageing population, it is unlikely to be sustained in relative terms even at its current rate.

In the meantime, people are living longer. “If you’re 55 now, you’ve a very good chance of living well into your eighties,” says Leonard. How to fund more years in retirement, with less years in employment, is the vexed question. Auto enrolment may be the answer.

Certainly, overseas experience is overwhelmingly positive. According to the OECD Pensions Outlook 2016, Australia has had compulsory schemes for decades, with the result that today 71 per cent of people over 15, and 85 per cent of people aged 25 to 54 have pension coverage.

“The UK, which is closest to us in terms of pension coverage, introduced auto enrolment in 2012, and it is estimated to have brought in an additional six million people into the pensions net there since then. What’s more, opt out rates are low, at less than 10 per cent, even among the youngest, most mobile workers,” says Leonard.

In Ireland the idea seems to be finding support. A recent poll by Taxback.com, which provides global tax filing and refund services, found that 84 per cent of respondents to a survey of 800 Irish tax payers backed the idea. Employers are generally supportive too, says Leonard, who is out meeting them every day: “There is good will towards it.”

All that is required now is the political will to introduce it.


In order to help provide for your retirement, starting a pension is one of the smartest financial decisions you can make. When choosing a pension, having all the information you need is key. Sound advice is invaluable, so it's a good idea to seek advice from a financial broker or advisor. Talk to your company’s scheme advisor or an independent financial advisor who will guide you through the process and help you select the right pension plan for your circumstances. You can find a local financial advisor near you with the Zurich Advisor Finder. Alternatively, Zurich’s Financial Planning Team can provide you with more information about Zurich's pension plans and options.

Zurich has a number of tools and tips to help you plan your retirement. The pension and retirement calculator can help you with your retirement planning and will show you how much you need to be financially secure in retirement. For more information visit www.zurichlife.ie. 

* Source: Press Release Population and Labour Force Projections 2016-2046.

Rose Leonard is head of distribution and customer relationship management at Zurich Life.

Zurich Life Assurance plc is regulated by the Central Bank of Ireland

More in Sponsored

The HIA’s online comparison tool is an easy option, allowing you to compare your current policy, or if you’re new to private health insurance, you can research all the options on one website. Photograph: Getty Images The really simple guide to switching your health insurance
There is plenty to keep you occupied in this southside village ad if you want, town is just a hop and a skip away. Illustration: Aoife Dooley Rathcoole Co Dublin is within city reach but has all the calm of the country
The Pfizer/BioNTech Covid-19 vaccine, received conditional marketing authorization by the EMA in December and is now being rolled out nationwide. Photograph: Getty images A triumph of science and innovation
With a host of local amenities, schools, shops and a beautiful beach, Bettystown is a winner. Illustration: Aoife Dooley Bettystown Co Meath is ideally situated for both Dublin and Belfast

Zurich Pensions Investments

Providing an occupational pension scheme is core part of a company’s overall benefits package. Photograph: Getty Images Employers need a strong pension provider to partner with them
In 2012 Zurich was an early adopter of the UN’s Principles of Responsible Investment, developed to reflect the increasing relevance of environmental, social and governance issues to investment practices. Photographs: Getty Images Save for your retirement the right way with a responsible investment approach
Pension investments often span more than 30 years, so it’s reassuring to seek out a provider that has shown a consistent and robust investment framework through all sorts of economic ups and downs. Photographs: Getty Images Choosing a pension? Look for a provider with a strong track record
The number of people who are concerned about not having enough money for their retirement has risen. Photographs: Getty Images New survey discovers almost half of Irish workers do not have a pension
These days, the vast majority of schemes are defined as contribution pension schemes - the more you put in the bigger your pension pot could be at retirement. Photography: Getty Images Everything you ever needed to know about pension contributions
The advantage of starting your pension young is that you can afford to take a higher investment risk, but pensions offer benefits for all age groups. Photograph: Getty Images The ultimate retirement countdown from your 20s to your 60s
Zurich ‘We have a very full active retirement, a bit too full at times, but it’s great’
Zurich Taking an active approach to investments
Zurich Retire and stop? Not in the future says pension forecaster
Zurich Auto enrolment could prove a highly effective retirement savings initiative
Zurich Planning to retire in style? Managing your income in retirement is key
Zurich Grey matters: Demystifying pensions
Pensions: Making the right decision Zurich survey reveals lack of pension knowledge
Millennials Millennials: The future is nearer than you think
Women and pensions ‘When it comes to women and pensions, things are not improving’
Zurich If you’re coasting along in retirement, do it in a yacht not a lifeboat
Pensions are like a marathon Why an early savings habit will set you up for the future
Zurich Deciding on the best route along the investment decision tree
Zurich Plan now for the life you want to live in retirement

Zurich Advertising Features

Zurich Financial planning for future generations
Pensions image Are you pension ready?
JP McMahon Back to the future: learning from the past, food diversity and sensory engagement
Multigenerational Are the sandwich generation in a pickle?
Zurich Designing your own future
Zurich Having the foresight to plan ahead
Zurich Adding up the cost of college
Pòl Ó Briain Signposting your future
Zurich Working out workers’ pensions
Zurich Pension report reveals future challenges for retirees
Zurich Counting the cost of living in retirement
Zurich Why financial advice is important today, and into the future
Zurich Wellbeing to retirement and beyond
Subscribe
About Us
Policy & Terms
Cookie Settings
Subscribe
  • Why Subscribe?
  • Subscription Bundles
  • Digital Subscriptions FAQs
  • Gift Subscriptions
  • Home Delivery
Irish Times Products & Services
  • ePaper
  • eBooks
  • Crosswords
  • Newspaper Archive
  • Email Alerts & Newsletters
  • Article Archive
  • Executive Jobs
  • Page Sales
  • Photo Sales
About Us
  • Advertise
  • Contact Us
  • The Irish Times Trust CLG
  • Careers
Download on the App Store Download on Google Play
  • Our Partners
  • Rewarding Times
  • MyHome.ie
  • Irish Racing
  • Top 1000
  • MyAntiques.ie
  • The Gloss
  • Irish Times Training
  • Terms & Conditions
  • Privacy Policy
  • Cookie Information
  • Cookie Settings
  • Community Standards
  • Copyright
  • FAQs
© 2018 THE IRISH TIMES

Sign In

Forgot Password?
Don't have an account?
Subscribe

  • Digital Subscriptions FAQs
  • Subscriber Only Articles
  • The ePaper
  • Subscriber Rewards
  • Subscriber Tour
  • Breaking news app
  • My Account
  • eBooks
  • Email Newsletters
  • Crossword Club
  • Newspaper Archive
  • Sign Out
SUBSCRIBE

Mon 18/1/2021
  • News
    • Coronavirus
    • Ireland
    • World
    • Politics
    • Crime & Law
    • Health
    • Education
    • Subscriber Only
    • ePaper
    • Brexit
  • Sport
    • Gaelic Games
    • Soccer
    • Rugby
    • Golf
    • Racing
    • Other Sports
    • Women in Sport
    • Comment
  • Business
    • Open for Business
    • The Economy
    • Your Money
    • Companies
    • Technology
    • Work
    • Commercial Property
    • Comment
  • Opinion
    • Editorials
    • Letters
    • Columnists
    • An Irishman's Diary
    • Opinion & Analysis
    • Martyn Turner
  • Life & Style
    • Food & Drink
    • Homes & Property
    • Health & Family
    • People
    • Travel
    • Motors
    • Fashion
    • Abroad
  • Culture
    • Books
    • Film
    • Music
    • Stage
    • Art & Design
    • TV, Radio, Web
    • Tuarascáil
    • Heritage
  • More
    • You are what you read
    • eBooks
    • Offers
    • Jobs
    • Family Notices
    • Competitions
  • Video
  • Podcasts
    • Confronting Coronavirus
    • Inside Politics
    • The Women's Podcast
    • Inside Business
    • Added Time
    • World View
    • Back to Yours
    • The Irish Times Book Club
  • Executive Jobs
  • Crosswords
  • Newsletters
  • Notices
Forgot Password?

Invalid email or password.

Not an Irish Times subscriber? Subscribe
  • Digital Subscriptions FAQs Frequently asked questions about your digital subscription
  • Subscriber Only Articles Specially selected and available only to our subscribers
  • Subscriber Rewards Exclusive offers, discounts and invitations
  • Subscriber Tour Explore the features of your subscription
  • Crossword Club Digital Simplex and Crosaire crosswords
  • Newspaper Archive 150 years of Irish Times journalism
  • My Account Manage your account
  • eBooks Carefully curated selections of Irish Times writing
  • Email Newsletters Sign up to get the stories you want delivered to your inbox
  • The ePaper An exact digital replica of the printed paper
  • Breaking news app Our Apple and Android apps to read on the go
  • Sign Out