Half of small firms not prepared for auto pension enrolment, says Irish Life
Half of Irish companies with fewer than 50 employees are not prepared at all for the introduction of automatic pension enrolment, even though they are more concerned than larger firms about the impact of the regime, according to a survey by research firm Red C for Irish Life.
The finding comes as the Government decided last month to postpone the launch of the auto-enrolment (AE) regime again, this time by three months to the start of January 2026.
The recent survey of 150 companies found, however, that three-quarters of larger companies have put work into considering the regime and the approach they plan to take, Irish Life said.
Many intend to nudge AE-eligible employees towards their own defined-contribution (DC) pension plans or include clauses in contracts for new employees that would compel them to join company schemes, according to Shane O'Farrell, Irish Life's director of workplace markets and employer solutions.
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'It's clear that a lot of smaller organisations have not yet thought about AE. It's going to end up being a budgeting shock for them if they don't engage with this,' said Mr O'Farrell, noting the survey has shown that small firms remain more concerned about the effects of AE on their business than larger ones.
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The Department of Social Protection has in recent weeks launched a search for a chief executive of the National Automatic Enrolment Retirement Savings Authority (Nearsa), which will oversee the administration of the AE scheme.
The appointee to the €215,000-a-year role will be expected to 'bring vision, strategic leadership and effective management across all the functions of the Nearsa in order to ensure that it discharges its functions efficiently and effectively to the benefit of its estimated 800,000 participants and Irish society more generally,' according to an information booklet for candidates. May 29th has been set as the closing date for applications.
The AE scheme will be known as My Future Fund. It is expected it will hold more than €20 billion of assets on behalf of beneficiaries within 10 years, rising potentially to more than €300 billion over 30-40 years, according to the booklet.
First proposed by then government Fianna Fáil minister Séamus Brennan in 2006, AE has been through years of delays and false dawns. However, enabling legislation was finally enacted last July and Indian group Tata Consultancy Services was signed up in October to build and run the AE system. The department is in the middle of procuring three investment managers to handle the assets in the fund.
Under the terms of the Irish scheme, which applies to workers aged between 23 and 60 who earn at least €20,000 per annum across one or more jobs, employers and employees will each initially contribute 1.5 per cent of gross earnings to their pension pot, with the government adding a further 0.5 per cent. The contributions are due to increase in stages over 10 years, reaching 6 per cent, 6 per cent and 2 per cent, respectively.
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