Auto-Enrolment Changes
Pensions auto-enrolment is a significant policy change, likely to affect some 750,000 employees who do not currently have any private pension provision, many of them lower paid. It would oblige employers to sign up all employees earning over €20,000 to a pension scheme, though they could then opt out if they wished. The idea is that this would lead to a much greater level of pensions coverage and leave fewer people at retirement age reliant solely on the State pension.
The goal of introducing a pension auto-enrolment scheme has received general support over the past number of years. However, despite the fact that this has been under discussion for many years, it looks likely that the target of introducing such a scheme early 2024 will be missed yet again.
IBEC claims that many businesses will not be ready and that there are significant doubts about whether a proposed State-run Central Processing Authority can be up and running in time. Draft legislation has not yet been published though it is promised from the Department of Social Protection early this year.
Where does that leave us?
In my opinion auto-enrolment is coming whether it be 2024 or later. Businesses will have no choice but to be prepared. It is a good idea but do you want your employees monies to be managed by a state scheme?
Does that mean we need to wait for auto enrolment to start a pension plan?
Absolutely not. In fact, getting your company scheme established now will eliminate a lot of trouble later as you already have your scheme established and therefore fall outside of the auto enrolment scheme.
What do I need to contribute for my employees?
The initial contribution proposed under the Auto-enrolment scheme is 1.5% of the salary. Typically schemes will contribute anywhere from 3% to 20% for their employees depending on the occupation.
Establishment and management of your company scheme can be taken care of by Oaktree Financial and we can assist your employees achieve their own financial goals. Please contact us by calling 025-30588 or book a complimentary chat here.
Adrian Godwin is a Senior Financial Consultant and the co-founder and managing director of Oaktree Financial Services. With a background in accounting and tax advising, Adrian specialises in estate planning and wealth management.Adrian offers clients reassurance through best practice solutions. His unique skill set and qualifications enable clients to develop comprehensive life plans that align with their goals.
