Today we’re living longer and healthier lives than ever before! This is fantastic! Right? Well… sorry to be Captain Buzzkill, but as a nation, with this increase in life expectancy our saving habits haven’t caught up. Put simply, we’re not saving enough for our retirement! It’s no good having all those extra years if you haven’t even got enough to go to bingo with the girls every weekend.
Many people are planning on relying solely on their State pension, but this would lead to a serious decline in the standard of living. Never fear, however, the Irish government is here. To combat this issue, the State is bringing in an automatic enrolment system where all employers will be required to enrol their employees into a workplace pension scheme and contribute towards the employee’s pension pot.
The government has spent the last few years ironing out all the details and, hallelujah... the day is nigh. A date has finally been announced by the Department of Employment Affairs and Social Protection, and from 2022 pension auto enrolment will be rolled out on a phased basis.
Under this new system, an employee will be automatically enrolled into a pension scheme. It will apply to all employees aged between 23 and 60, earning more than €20,000 a year and not already in a workplace pension scheme. To begin with, the employee contribution will equal 1% of their salary, increasing to 6% of their salary in their tenth year of employment.
For employees, the best bit is that your employer will be required to contribute the same percentage, so after 6 years, workers and employers will be saving a combined 12% of salary into a pension. The State will then add a further 2% contribution which makes a whopping total of 14% of salary with a cap of €75,000. That will be more than enough to buy two double books and a couple of cans of Sprite at the bingo on weekends!
So how automatic is automatic? Well, as an employee, it’s completely automated. That’s the beauty. However, if you’re an employer, then you’ll likely have certain mandatory auto enrolment duties to complete. Such as:
Wow, that actually sounds like a lot of work I say as I wipe the sweat from my top lip. Not if you’re a Thesaurus Software customer! Thesaurus Payroll Manager is ahead of the auto enrolment curve and will automate all of these pesky auto enrolment tasks to ensure the transition is seamless. The best part is that they won’t charge you anything extra for any auto enrolment features.