The Irish Association of Pension Funds (IAPF) has urged the Government to definitely assert a kick-start date for the monumental Auto-Enrolment (AE) pension plan or affirm its incapability to do so in the coming year. This request was made by the activist group with a proposal prior to the reveal of the 2025 Budget on October 1st.
The Department of Social Protection has the objective to launch the scheme early in 2025. This programme is intended to encompass 750,000 employees without an employer-based or individual pension, following a sequence of postponements.
“The IAPF is in favour of the automatic enrolment initiative. We see it paramount to its rapid implementation with the goal to increase pension provision in Ireland,” so said the IAPF, helmed by CEO, Jerry Moriarty, in the submission. “The consistent deferrals of the AE’s initiation is discouraging as very few established benchmarks have been accomplished.”
The institution expressed doubt about the AE’s introduction in the early half of 2025. They stated that a definite declaration in the 2025 Budget concerning the AE’s initiation or non-initiation would contribute to its ultimate success. The IAPF anticipates this revelation once a practicable strategy for all remaining problematic matters has been settled.
In July, the Department declared its preferred collaboration with the Indian tech firm, Tata Consultancy Services. This announcement came after necessary legalisation was approved for the scheme. However, the general point of view suggests that the AE, first recommended in 2006 by Séamus Brennan, will not take effect in the initial part of 2025.
A government body responsible for administering AE is still in the planning stages, as there has been no progress in recruiting personnel or initiating the formal process for identifying asset management companies to handle the foundational investments.
The IAPF emphasises the importance of a well-defined communication strategy to inform both employers and employees about the plan, as well as meticulous involvement with payroll providers to instigate and examine crucial amendments to software systems.
AE is anticipated to be relevant to employees aged from 23 to 60 who earn a minimum annual income of €20,000 and are not currently enrolled in occupational schemes.
Under the AE proposal, both employees and their employers will initially contribute 1.5 per cent of the individual’s gross salary into the plan. This contribution is scheduled to rise to 3 per cent from the fourth year, increase to 4.5 per cent in the seventh year, and reach 6 per cent from the tenth year onwards.