How Employers can prepare for Auto Enrolment

Employers need to get information, to know what the potential impact Auto Enrolment will be, if and when it rolls out. This boils down to budgeting for AE, if Employers don’t already have a scheme in place, or if they do have a scheme in place what do they need to do to tweak it to meet the requirements of auto-enrolment.

• Auto-enrolment will be mandatory for employees between the ages of 23-60 earing €20,000+ pa. From what we know so far about proportions, for every €3 contributed by employees, employers will match that and the State will add an additional €1. This will be for a minimum of 1.5% of gross pay in the first three years rising to 6% in year 10.
• There are currently more than 750,000 people without a pension in Ireland, and while many assume the old age pension from the State will be there to support them, it may be too little to support their lifestyles and there is no guarantee it will still be around for future generations when they reach retirement age.
• The idea behind auto-enrolment is to encourage those that aren’t currently saving for their retirement years to start now. Only 46% of the Irish population are saving into a pension scheme currently, according to research, leaving 54% of the population unprepared for their retirement.
• For employers with an Occupational Pension Scheme already in place they should now be getting advice on whether or not their current scheme is fit for purpose. If not, changes will need to be made to their existing plan or they can take out a new plan.
• For employers not currently offering a scheme, they’ve two options: 1) Do nothing and wait for when Auto-Enrolment comes into force or 2) seek out advice now on your options from a reputable provider to set up a private pension scheme for your company.