Minister for Social Protection Heather Humphreys has said that she expects to have auto enrolment pension legislation through the Houses of the Oireachtas in the next session and to have it “up and running” by the end of the year.
Under the proposed legislation, auto enrolment would mean that for every €3 a worker puts towards their pension, their employer would also put €3 into the pension plan and the State would add a further euro.
“It's about putting away a little on a weekly or a monthly basis to provide for a pension pot for when you retire. It's a bit like the old SSIA scheme,” she told RTÉ radio’s Today with Claire Byrne show.
“This about ensuring that 750,000 people, mainly women who are not in a pension scheme, will have a pension plan to retire. And in actual fact, in 30 years time, over a quarter of our population will be over 65. And we want them to have more money to spend when they retire. So that means it will be good for the economy.
“I am conscious that some employers have concerns about the introduction of the auto enrolment and the cost involved. I have engaged with employers representative groups.
"I have listened to their concerns. So automatic enrolment would be phased in over ten years. It's starting at a very low 1.5 percent of gross pay for the first three years, and then gradually increasing up to six percent in year ten.”
Ms Humphreys said that she hopes to have the draft legislation presented to Cabinet “in the next week or two” and then for the proposal to “make its journey” through the Houses of the Oireachtas.
“I will work on the hours I need to get this through. Because you must remember, we've been talking about auto enrolment for the last 30 years and nothing has happened.”
“We have taken a look at what has happened in other European countries, we’re an outlier as far as everybody else is concerned, we don't have an auto enrolment system and we have learned from what they have been doing.
“So I am confident that this would be up and running at the end of this year, and I want to work really hard to ensure that happens. A lot of work has gone into this, a lot of talking. It's like pushing a stone up the hill and we’re nearly at the top there.
"I want to make sure that people benefit from a pension because we don't want this cliff edge of drop in their income when they retire at the age of 66. The state pension stays in place, but a lot of people find that their income drops considerably.”
