What is Pension Automatic Enrolment?
Approximately 66% of all employees in the private sector do not have a pension or money set aside for retirement. With the Contributory State pension currently at €12,651 pa for many this could mean a significant drop in income come retirement.
Many workers miss out on valuable pension benefits either because they don’t take out a personal pension, their employer doesn’t offer them a pension, or they opted not to join their employers’ pension scheme. The Minister for Social Protection, Regina Doherty, recently launched proposals on automatic pension enrolment which will try to change this. It will make it compulsory for employers to automatically enrol their eligible workers into a pension scheme. The plan is to introduce auto-enrolment 2022 on a phased basis, targeting the low to middle income earners who do not have a pension plan in place.
What are the proposals?
- Private sector workers aged between 23 and 60 earning more than €20,000pa will be automatically enrolled;
- Workers earning less than €20,000 will be able to opt into the scheme;
- Contribution levels will be set at 1% of wages from 2022, with employers being ordered to match the amount;
- The State will contribute €1 for every €3 put into the pension by the member;
- Contribution levels to rise to 6% per member by 2028;
- Workers earning more than €75,000 can contribute but the employer does not have to match contributions above that amount;
- The self- employed will be able to opt into the scheme;
- Workers will be able to opt out after a suggested minimum period of six months but will have a limited time to do so;
- From month nine workers will be unable to opt out but they may be able to suspend or temporarily stop their payment of contributions;
- Employees will choose a fund, depending on their appetite for risk, into which their contributions will be invested. If they do not choose a fund, they will be put in a default fund;
- The pension fund will be run by a private sector pension provider; and
- Retirement benefits will become payable when the recipient’s State Pension becomes payable.
These proposals are open for debate and nothing has yet been finalised.
You can give your views.
The consultation period will remain open until 4 November 2018 and you can email your views to firstname.lastname@example.org or in writing to;
Automatic Enrolment Programme Management Office
Department of Employment Affairs and Social Protection
Floor 1, Áras Mhic Dhiarmada Store Street
For more information check out the following link – https://bit.ly/2FDxmiI
Where can you get advice?
Contact us today on 074 9321420 if you are interested in finding out more about your own pension options, or if you are in business looking for a personal pension for yourself or a group scheme for your employees. We can provide you with the independent pension advice you require to ensure that your pension plan meets your needs.
Why Choose MLMG Financial Brokers
At MLMG Financial Brokers we believe in keeping it simple. Put simply financial planning is ensuring that you are as well prepared as you can be to meet the financial demands that will face you at different stages of your life. We provide honest expert financial advice in a way that is easy to understand. Every client, big and small, is treated the same; you will be advised on the basis that we are standing in your shoes.; We will take the time to ensure you fully understand your finances and your financial needs We are not tied to any particular provider so we advise on all the main provider products and with over 60 years’ of combined experience in financial services, you can trust our expert, impartial advice.
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