Delivering on a commitment made in the Government’s Roadmap for Pensions Reform 2018-2023 (Action 2.1), the Minister for Employment Affairs and Social Protection Regina Doherty T.D. recently (22nd August 2018) launched a ‘Strawman Proposal for a new Automatic Enrolment Retirement Savings System in Ireland’.
To support this process, on Monday 1st October, Minister Doherty launched the first in a series of Regional Public Consultation Seminars on the Government’s Strawman proposal in Dublin.
The Roadmap for Pensions Reform confirms that the Government will introduce Automatic Enrolment (AE), by 2022, as a State sponsored supplementary workplace retirement savings system. It is intended that those saving in the AE system will be supported by both employer and State contributions. Whilst workers will have the freedom to opt-out should they so choose, experience in other countries indicates that once automatically enrolled workers tend to remain within the system.
Commenting at the consultation event the Minister confirmed that
“Automatic Enrolment (or AE) is perhaps the most fundamental policy reform in a generation in terms of retirement savings provision. The new Auto Enrolment system will, when implemented, enable people to save and accumulate sufficient assets to maintain better personal living standards in their retirement. In this way, the combined use of public pensions and private retirement savings allows employees, employers and the State to each play a part in addressing the provision of improved retirement incomes.”
The Roadmap for Pensions Reform 2018-2023 encompasses major reforms of future State, private and public service pension provisions. The Government has confirmed the State pension is, and will remain, the bedrock of the pension system and a protection against poverty. However, the State pension is not designed or intended to deliver full income adequacy in retirement. To achieve such an outcome, it is recognised that most employees should supplement their State pension income with personal retirement savings. Yet just 35% of the private sector workforce has private pensions coverage and Ireland is one of only two OECD countries without a mandatory earnings related element to retirement saving.
The Strawman proposal for a new Automatic Enrolment Retirement Savings System together with other support documents is available on welfare.ie To give those who may want quick and easy access to the proposals, a summarised ‘Plain English’ version of the Strawman has also been produced.