What About My Pension?

I Thought Auto Enrolment was in January?  What Happened?

There’s no doubt the high cost of living is impacting employees and employers nationwide.  Whilst this week’s budget may provide some supports to some, it will still leave us in a country where increased costs are likely to remain with us.

How do I Invest in a Pension When My Living Costs are so High?

In a climate where immediate costs remain high, the working population is less likely to set aside money for their long term future, in the form of pensions.  In fact; according to a 2023 survey carried out by the Central Statistics Office (CSO), 32% of workers aged between 20 and 69 are not signed up to a private pension.

We also have an ever ageing population post retirement age.  According to the CSO, the number of people aged 65 years and over is estimated to have risen by over 40% between 2013 and 2023, from 569,000 to 806,000, and is expected to double again to 1.6 million by 2051.

Preparing for Pension Age Becomes More Important for our Long Term Economy.

Some of this Burden will be carried by Irish Employers in Conjunction with their Employees.

Employment costs have risen year on year in recent years.  Hiring decisions are well thought out before embarking upon the next hire in most companies.  Providing benefits to employees is something that most employers aspire to achieve.  The majority of employers look after their employees well, and see them as an important part of their business.

The Automatic Enrolment Retirement Savings Systems Act 2024 (“AE Act”)

The Automatic Enrolment Retirement Savings Systems Act 2024 (‘AE Act’) which was initiated on 5th April 2024 was recently passed by both Houses of the Oireachtas and was signed into law by the President on 9th July 2024.  The effective date was meant to be 1st January 2025.

Numerous Auto Enrolment Webinars Have Taken Place This Year

Countless seminars and webinars have been held nationwide in the year to date, with the exact set up of the scheme not quite certain.   The start date of 1st January 2025 seemed unlikely and in fact; it has been determined to be impractical and the start date will now be 30th September 2025.  This new start date was agreed by Cabinet in the last week.

There will be relief on two fronts in many organisations; firstly in that the structure has not been set out clearly yet and secondly that much increased hiring costs are putting severe pressure on business as it stands today, including the employer PRSI rate which increased this week.

Pushing the can down the road too far is not ideal.

Auto enrolment pensions have been discussed for years.

We are only now approaching the likely start date in the next year and it’s important that we make the best of this opportunity to ensure the pension funds are well managed by government and ensure that the likely funds at retirement are actually there for our hard working population.