The Irish government has published Automatic Enrolment Retirement Savings System Bill 2024, which is now with Parliament and is expected to pass, with enactment by July 2024 and implementation in January 2025 of the mandate for employers to enroll employees in a new workplace retirement savings system.
Full commentary on the bill and a detailed overview of the new Automatic Enrolment (AE) system can be found in our article: Irish Government publishes the Automatic Enrolment Retirement Savings System Bill.
Though designs vary, the typical retirement plan offered by employers is a DC arrangement, jointly funded by employee and employer contributions at 12% of base pay at the median (7% from the employer and 5% from the employee). However, many employers have cohorts of employees who do not participate in their plans, either because they are not (yet) eligible or they are eligible but have not engaged with retirement saving. When the new AE system goes live, any employees on an employer’s payroll who do not participate in the employer’s plan would be auto-enrolled in the government AE plan. This would result in companies running dual pension systems for their employees. The government AE plan is inferior to the vast majority of occupational pension plans, so it is important that companies consider their AE strategy and plan any necessary employee communications ahead of the AE system going live in early 2025.