Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The introduction of an automatic enrolment (AE) retirement savings system is a Programme for Government commitment and a key priority for me as the Minister for Social Protection. Implementation of the AE system is well underway, with the Automatic Enrolment Retirement Savings System Bill 2024 now published and a tender process to contract for administration services being well advanced. Enrolment of the first participants is expected to commence in January 2025.

The AE system is being set up to help people who do not currently have pension coverage to start saving for their retirement. Employees who are aged between 23 and 60, earning more than €20,000 a year across all of their employments and who aren’t currently in an occupational pension scheme or equivalent will be automatically enrolled. Payroll data will be used to determine eligibility, and the instruction for contributions will also be issued via payroll.

Any employee outside of those age and earnings brackets, who is under the State Pension age (66), and who is not already actively contributing into a pension scheme, will be able to opt in.

It is important to note that contributions will start at 1.5% of the employee's gross earnings for both the employee and employer, and will rise by 1.5 percentage points every three years until 6% is reached in year 10. As contribution rates for AE start at a modest level, it is likely that employees currently enrolled in a private or occupational pension scheme will be making higher contributions than those in the early years of AE. Members of existing pension schemes will not receive the State top-up contribution provided through AE as they already receive tax relief on their pension contributions.

I hope that this clarifies matters for the Deputy.