The long-awaited new auto-enrolment pension scheme announced by Minister Heather Humphreys last week plans to automatically enrol an estimated 750,000 workers aged between 23 and 60 and earning over €20,000 from January 2024. They may choose to ‘opt out’ after six months but will be automatically enrolled again after two years.
For the first three years, employers will be required to match employee contributions at a rate of 1.5 percent to a maximum of €80,000 earnings. The Government will also contribute €1 for every €3 contributed by employees. The contribution rates for employees and employers will increase to 6 percent over a ten-year period.
Chartered Accountants Ireland has long advocated for the introduction of auto-enrolment as a measure to address the low private pension coverage rates in Ireland and to help reduce the reliance on the State Pension. Following the announcement, the Institute issued this statement noting that sustained momentum would be needed by Government to meet the ambitious timeline set out and also sought clarity on how the existing model of tax relief for pension contributions would operate alongside the proposed State contribution model for auto-enrolment.
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