A wave of pessimism and concern has met the new Government pension scheme with Cork TDs expressing unease at a number of caveats within the rollout.
Solidarity TD Mick Barry said Ireland is a complete outlier among Northern European nations when it comes to the level of social insurance contributions made by employers.
“The level here is very low. Raising this should be the key to addressing the pension needs of the workforce in the years ahead.”
Mr Barry also said he had concerns the opt-out scheme would be abused by employers.
Sinn Féin TD Donnchadh Ó Laoghaire said Sinn Féin had been calling for auto-enrollment in relation to pension schemes since 2018 and said accountability and transparency were a concern in relation to the management of the scheme.
“We have seen pension disasters in the past, I'm a bit concerned about transparency and accountability. The National Treasury Management Agency (NTMA) should effectively be managing this scheme on behalf of the state, they have significant experience and they are well placed to do so. The Government should be prioritising the financial wellbeing of the citizens.”
The new scheme will be gradually introduced on a phased basis. With the system set up by 2023 for employee enrolments in 2024, the introduction of auto enrolment will be very gradually phased in over a decade, with both employer and employee contributions starting at 1.5%, and increasing every three years by 1.5% until they eventually reach 6% by Year 10 (2034). This steady phasing allows time for both employers and employees to adjust to the new system.
All employees not already in an occupational pension scheme, aged between 23 and 60 and earning over €20,000 across all of their employments, will be automatically enrolled.
Minister for Social Protection, Heather Humphreys said:
Minister Humphreys also said the “major” reform was to get people saving earlier.
“This major reform in the Irish pensions landscape is intended not just to get people saving earlier but to support them in that saving process by simplifying the pension choices and importantly by providing for significant employer and State contributions as well.
“What we are doing today is putting in place a system whereby people can save for their retirement.”