Ireland introduces auto-enrollment defined contribution pensions scheme 

In 2022, the Irish Government announced its plans to introduce an Automatic Enrollment Retirement Savings System. The System is expected to be gradually phased in over a ten-year period and is designed to boost the level of workplace savings.  Employees can opt-out of the system if they wish after six months’ membership.  Membership covers all workers with aggregate earnings across all employments in Ireland of €20,000 or more, and who are not already participating in an occupational pension plan. 

Employee contributions are set as a percentage of earnings as follows:

·         Years 1-3:                             1.5%

·         Years 4-6:                             3.0%

·         Years 7-9:                             4.5%

·         Year 10 onwards:                6.0%

Employers must match the employees’ contributions payable in respect of earnings amounts up to €80,000 per annum. The Government will also provide a further payment of one third of the employee contribution. This will result in an overall contribution of 3.5% of relevant earnings in year one (targeted to be 2024) rising to 14% of relevant earnings from 2033.

The targeted first enrollments were initially set for January 1st 2024, but the bill is now expected to be published by 3 April 2024, with the first enrollments set to occur from January 2025. This will include the establishment of the operational central processing infrastructure and the selection of commercial investment fund providers.