Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
THE GOVERNMENT’S NEW auto-enrolment pension scheme was approved earlier this morning and is set to come into effect in early 2024 for approximately 750,000 workers across the State.
The scheme has been in the works for several years and was initially planned to come into effect this year but was delayed due to the Covid-19 pandemic.
The scheme itself is being brought because of the pensions time bomb coming down the line due to not enough people having an occupational or supplementary pension for when they retire.
Who is impacted by the auto-enrolment scheme?
The Government confirmed this morning that there are approximately 750,000 people between 23 and 60 who are employed and not currently enrolled in an occupational pension scheme.
These 750,000 people are being targeted through the auto-enrolment scheme to ensure that they begin saving for their pension and that they are not left on just the State pension when they retire.
How does the scheme work?
The new plan will see contributions paid by employees being matched by their employers as a percentage of the employee’s gross income.
The State will also add a top-up to the money paid into the pension pot.
For example, an employee could pay in €3 to their pension. This means that employers must match that €3 and the State will top it up by €1.
The contribution rates are set to be phased in over a decade as follows:
As the scheme is opt-out rather than opt-in, people without an occupational or supplementary pension will not need to do anything to start paying into their pension fund.
Can I opt-out of the scheme?
Yes, employees who do not want to pay into the scheme are able to opt out, but this cannot be done immediately.
According to Social Protection Minister Heather Humphreys, anyone who is accessing the scheme will have to wait six months after it starts until they are able to opt-out.
After this, any money that they have saved in that six months may be returned to them, but contributions paid by both employers and the State will remain in the pension pot.
However, this is not an indefinite opt-out and employees will be automatically opted-in after two years.
The same procedure applies, where they will have to wait six months before they can opt back out again.
Are contributions capped?
Both employer and State contributions are capped at a maximum of €80,000 of an employee’s gross annual salary.
However, employees can contribute on earnings greater than €80,000 if they wish.
I have a Personal Retirement Savings Account (PRSA). Can I sign up for the new scheme when it is rolled out?
At present, elements of this are still being worked out.
When asked by The Journal about this issue, Humphreys said that under current plans people can have a paid up PRSA pot and then join the new auto-enrollment scheme while leaving the PRSA pot where it is.
Humphreys then added that the Department is checking to see whether or not it is possible to have the PRSA in operation alongside the new auto-enrollment scheme.
“There’s there’s a bit of detail to be worked out on that but we’re trying to make it as attractive as we can because people who did, in fairness, sign up to the PRSA, we want to make sure that they’re looked after as well because they’re not getting the employer contribution.”
According to Tim Duggan, assistant Secretary General at the Department of Social Protection, the first priority is the 750,000 people who do not have any pension provision and when they are looked after, legal matters around PRSA pension pots will be tackled.
“The focus initially is on the 750,000 people who don’t have any provision and then subsequent to that, we’ll be trying to see how we can make the system facilitate people who already have arrangements but would prefer to switch.”
Can I drawdown my pension early under the new plan?
In most circumstances, no, people will not be able to drawdown their pension early through the new scheme.
Currently the only circumstance where someone can drawdown their pension through this proposed scheme before their retirement age is an extreme illness.
“There won’t be earlier drawdown than the retirement age for any other circumstances,” said Duggan.
According to Duggan, the specifics of pension drawdown through illness will be worked on when the legislation is drafted later this year.
In 2024, when the new scheme is set to be in place, the pension age will still be 66.
Can I contribute lump sums to the new pension scheme?
Currently, no. Humphreys said that the immediate plan is to get the scheme up and running before they look at allowing additional voluntary contributions.
However, Humphreys said it is something that they can examine after the scheme is up and running.
Where are my savings going?
Employees who are enrolled in the new scheme will have four different retirement savings funds to choose from.
These funds will all have different risk/reward profiles, going from conservative, medium-risk to high-risk. There will also be one default fund based on what the Department calls a ‘life-cycle’ investment profile.
Anyone who does not choose a specific fund will be enrolled in the default fund.
Will the State pension remain in place?
Yes, Humphreys confirmed that the State pension will remain and will be the “bedrock” of the new auto-enrolment scheme.
Additional reporting by Christina Finn
To embed this post, copy the code below on your site
In the olden days people used to cook for their own kids, and on the rare occasions they might have brought them out for dinner the majority recognised that the chef and restaurant staff weren’t surrogate parents there to serve their children’s best interests.
@Winston Smith: yeah that’s a lovely tale of the days of yore. Surely on the rare occasion a family eats out they should be able to reasonably assume that the children’s menu is suitable for a child.
@Winston Smith: Its because both mammy and daddy now have to work….we have created the perfect conditions for stress and healthiness at home because of the dream of women working….I personally think they are nuts staying home minding kids is a hell of a lot less stressful then a full time job….men and women will soon be dying roughly the same age as each other soon because of this.
@Winston Smith: Also in the old days , kids were running around like mad yokes from dawn til dusk. Calories were soon shed.
@Peter Hughes: not sure how you find children less stressful than a job..
It takes me 2-3 days to recover from spending a day with my cousins’ kids, and that’s with minimal interaction. On the other hand, after a stressful day at my job, I used to just ring my mother, vent for a few minutes and then felt better.
I will never have children, and right now am very thankful for that position, as I’m broke (less than €5 in my bank account), unemoloyed, and on the verge of homelessness, following a screw up from my electricity supplier, that left me in more debt than I can afford.
Just as well there are no children in this with me.
@Mirabelle Stonegate: The thing is now women like men have to work and bring up the kids…..its a lose lose situation, no time for anything because both parents are flat out and stressed constantly….no breaks for anyone, cache bills and all sorts on top…..I really don’t know how they manage these days and not fall apart…..sorry to hear about your situation by the way.
@Winston Smith: ah the old days when the country was skint. I miss them. No wait I don’t!
@Peter Hughes: I love how you assume most mother’s work because they want to rather than that silly desire to… I don’t know…live indoors…the cost of living has skyrocketed to the point where both parents have to work. They don’t have a choice.
Of course many women would choose to work outside the home but the choice simply isn’t there for most.
@Peter Hughes: I absolutely agree that it’s not great that in most cases, both parents need to work.. but why automatically assume the mother will be the one to stay at home?
I mean, as soon as I turned 10 and was old enough to be trusted at home alone for a couple of hours, my mum jumped at the chance to go back to work. She happened to find it more fulfilling than being a stay at home mum. My dad has always earned enough that she has never needed to work, but she’s been at her current place of employment for about 20 years now and is happy with that.
If/when she retired, I can see her setting up a side gig, just to have something to do that is similar to a job, but on her own terms. She could do it now, if she wanted to, but just doesn’t feel like it yet.
Restaurants seem to think the only thing that kids are capable of eating are burgers, sausages and chips. I can never understand why they just don’t sell 1/2 portions of their normal menu at 1/2 price?
@Shakka1244: Honestly what normal kid actually wants the depth of flavour thats usually in a grown ups dish? I know there are those absolute legends out there that have their little ones gobbling down oysters at age two, but come on.
@Cynical: You have taken my comment to the absolute extreme. So you think it’s OK that burgers, sausages and chips are the only thing available on kids menus in the vast majority of places? Why not provide additional options?
Eating meals out can be unhealthy. Wow that is a serious bit of research done there. Money well spent. Look at any kids menu and it will be burger and chips, nuggets and chips, pizza etc. That’s why you dont bring your kids out for dinner every day. Once in a while is fine. I’d say a high percentage of adult meals are also fattier than recommended and if anyone is relying on restaurants for every meal they will end up fat.
@Hugh Jass: just don’t buy off the kids menu, we never did. Small portion of a normal dinner instead
Just leave the kids at home. Sorted.
@Luke Lee: can’t wait till mine are old enough to drive…
@Luke Lee: You’ve been watching the McCanns it seems.
Jesus just order something healthy then for them ffs
@Patti o furniture: Loaves and fishes it is then.
Bit of a misleading headline considering it was 20 popular chain restaurants who most likely use cheap mass manufactured ingredients and not your average good quality restaurant who uses fresh ingredients and cooks from scratch.
@Mill Lane: Agreed it’s the chemicals they add to this food that do extra damage…riddled with E numbers and preservatives pure and utter poison
Eating out is supposed to be fun and a treat for the family. Kids will generally eat their nuggets and chips without fuss, whereas cajoling them to eat their veggies can take some of the fun away. It’s not like it’s an everyday occurrence to eat out.
So they invent all this food that looks great and tastes great, then they let you taste it and then scream DON’T EAT THAT, ITS BAD FOR YOU!!!I hate that….:(
A lot of full service restaurants shove out the same junk as fast food places, on their kiddie menu, with the exception of maybe a half bolognese or some mash added on.
Either way most younger kids leave half of it behind.
Fast food unhealthy? Well I never!!
Parents need to cop on to themselves and not bring their children to these places. What kind of treat is it to feed your child that slop?
@Ed: A break from cooking ? I cook all the meals at home I like a break every now and then.
@Joanne McLaughlin: A break from cooking doesn’t mean you have to take them somewhere that sells slop packaged nicely in a happy meal box.
@Ed: If you had read it properly it said that the meals in sit down restaurants contained more fat salt and calories than fast food places.
@Joanne McLaughlin: I never said to go to a sit down restaurant.
Shockin news …. welli never….
Whatever about adults , we are old enough to differentiate between good healthy food and processed crap but please don’t force it on kids.
They will grow up into another “chipper” generation.
Carbs are the problem, not fat. Carbs store fat
Your headline synopsis is misleading. Please learn how to use commas properly.
This is another load of BS from the white coat fraternity.
Someone at The Journal really needs to learn English. The article headline states that “kids meals” are healthier than those at full-service restaurants. ….
I love seeing fat, rotund 10 year olds with pink cheeks. It’s a mark of the progress we’re making in nutrition.
have your say