The key elements of a new auto-enrolment pension system in Ireland has been agreed in principle by Government. This follows a year of public consultation, in which Cork Chamber engaged.
Planned to be introduced in 2022, under the auto-enrolment savings system employees, employers and the State will each make a contribution to the member’s account.
Key elements include:
· Current and new employees aged between 23 and 60 years of age and earning €20,000 or above per annum (across all employments) will be automatically enrolled.
· Those earning below €20,000 per annum (across all employments) and those employees aged under 23 and over 60 will be able to ‘opt-in’ to the system.
· There will be no employee waiting period before enrolment.
· Employees who are existing members of a pension scheme/contract which meets prescribed minimum standards and contribution levels will not be automatically enrolled for the employment to which that pension relates.
Contributions:
· During the phased roll-out of AE, employees will be required to make initial minimum default contributions of 1.5% of qualifying earnings, increasing by 1.5 percentage points every 3 years thereafter to a maximum contribution of 6% at the beginning of year 10.
· Employers will be required to make a matching (tax deductible) contribution on behalf of the employee at the specified contribution rate.
· Employer contributions will be limited to a qualifying earnings threshold of €75,000 – which will be reviewed over time.
Further information available here.
