The Oireachtas Joint Committee on Social Protection, Community and Rural Development and the Islands is examining draft proposals for a scheme that will automatically enrol workers between the ages of 23 and 60 earning more than €20,0000 a year into a workplace pension scheme. The Government has committed to have the scheme up and running by early 2024 though Department of Finance officials have now cast doubts on whether that timeline is achievable.
Mr O’Brien will also call for the auto-enrolment of self-employed people, who Ibec says make up 16 per cent of the working population, in the pension scheme on the basis that only about 30 per cent of this group had personal pension cover.But it objects to the current €80,000 salary cap on which employers and workers will have to pay contributions, claiming it is too high and the scheme “should be more focused on building contributions for entry-level, low-cost savings”.
He will say that Ibec is “particularly concerned” at the plan to automatically re-enrol workers who opt out of the scheme after two years, rather than three as originally proposed, arguing that it would impose “an excessive administrative burden on employers” and suggesting that the lack of a waiting period before enrolment could undermine existing occupational pension schemes.
Despite Ibec’s reservations, it remains a “strong advocate for automatic enrolment”, he will say, with pension coverage outside the State pension “stubbornly low, despite policy announcements by successive governments over the last 20 years”. Failure to introduce a scheme to broaden occupation pension coverage will “risk doing serious damage to our consumer economy leaving a generation with substandard pensions coverage and an unsustainable bill for the State”, the employer’s group will tell the committee.
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