In a Statement of Priorities 2014 – 2016, the Government announced its decision to implement a new universal retirement savings scheme.
One key purpose of the scheme is to make it mandatory for workers to contribute to a pension scheme - thereby reducing future liabilities of the Exchequer to pay social welfare to a growing group of retired people.
The 2002 Pensions Act made it obligatory on employers to provide access to a pension scheme for their employees but stopped short of making contributions compulsory. In the UK, that additional step was taken some years later with the introduction of the National Employment Savings Trust (NEST). Mandatory pension contributions are now a reality for employers and employees in the United Kingdom.
With a nod to the UK system, the Department of Social Protection recently invited industry participants to submit their views on auto-enrolment in an Irish context.
ITC took part and through a number of industry bodies we advocated against the set-up of an expensive, unnecessary State-run body which is only likely to provide underperforming pensions. We said that such a step would not be in the interest of consumers and taxpayers and we suggested that our current flexible pensions system be simplified and used instead.
No doubt that the media will report on this development when its effects on workers and employers become apparent.
For more information or to request a copy of the submission of the Association of Pension Trustees in Ireland, please contact Tommy Nielsen by emailing firstname.lastname@example.org.
*Please note this content is the view of the author and not of Independent Trustee Company