Pension Auto-Enrolment in Ireland
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Contents
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Aon’s Pension Auto-Enrolment report explores the attitudes and actions among HR, finance and business leaders in Ireland regarding the introduction of a new Irish pension auto-enrolment system in January 2025.
While our research reveals high levels of awareness of the scheme amongst employers, more than two thirds of respondents expressed concerns about aspects of the scheme design, including its cost implications and other technical issues. Download our full report to read more insights into Pension Auto-Enrolment in Ireland.
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Methodology & Key Takeaways
Between February and March 2024, iReach Insights conducted research on behalf of Aon Ireland to examine the challenges and impacts of implementing the proposed new auto-enrolment retirement savings scheme in Ireland.
The research involved 151 business decision makers as well as specialists directly involved with pensions and auto-enrolment. Participants in the research included 45 mid-sized businesses, 37 large businesses and 69 enterprises with 250+ employees.
The key findings include:
The majority of organisations (78%) report that they are familiar with the new system.
More than two in three (67%) Irish businesses have concerns about the implementation of auto-enrolment.
More than a third (35%) of firms have yet to take any action in preparing for auto-enrolment despite the new scheme being earmarked for introduction in eight months’ time.
Many businesses are uncertain about the feasibility of the timeline for reform, with just 52% of respondents believing that the implementation of the new system is possible by its scheduled January 2025 deadline.
Over a third (38%) of employers state that their organisation has not received sufficient clarity about the design and details of the new system.
Most organisations in Ireland (64%) believe the new legislation will create a more equitable pensions system by helping to reduce the gender pensions gap.
Ireland’s Pension Landscape
The Irish pensions landscape is undergoing fundamental transformation. Firstly, the transposition into Irish law of the IORP II Directive has placed a greater compliance burden on employers and trustees of occupational pension schemes.
Secondly, the reform of the State pension is giving workers greater choice as to when it first comes into payment.
Thirdly, the introduction of the auto-enrolment retirement savings scheme has the potential to make a real difference to the very low level of supplementary pension cover among private workers.
Auto-Enrolment Overview
The auto-enrolment savings system has been under discussion for at least 20 years. The intention is to address the persistently low rate of private pension cover in Ireland and to reduce the numbers relying solely on the State pension when they retire.
It is clear from our findings that the new auto-enrolment retirement savings system is broadly viewed positively by businesses in Ireland. There are high levels of awareness of the system across the business community and a good understanding of the opportunities that it can unlock in creating a fairer and more equitable pension system.
Results reveal that most businesses (64%) believe the new legislation can support reducing the gender pension gap.
Preparing for Change
Findings from the report show high levels of awareness (74%) of the planned introduction of auto-enrolment. Awareness of the scheme was highest among enterprises with more than 250 employees, while mid-sized businesses had the lowest level of awareness of the scheme at 64%.
Most companies in Ireland (74%) are confident that their organisation is prepared for the new auto-enrolment system. Levels of confidence are greatest among enterprises with more than 250 employees (83%), closely followed by large enterprises (80%) and mid-sized enterprises (64%).
Navigating New Challenges
Our findings reveal that more than two thirds (67%) of Irish businesses have concerns about the implementation of auto-enrolment. The chief concerns relate to the increased costs of additional contributions (28%) and impacts on existing pension scheme contributions (28%).
Organisations are also worried about the expense of setting up the new scheme (21%), the time needed to implement new systems (19%) and the impact on eligibility conditions applicable to existing schemes (18%).
Significantly, 38% of businesses state that their organisation has not received sufficient clarity about the design and details of the new system in advance of the launch.
Impact of Reform
Our report highlights the importance of the scheme in reforming Ireland’s pensions landscape and creating a fairer and more equitable system fit for the future.
The research reveals that 64% of businesses believe the new legislation can support reducing the gender pension gap which currently stands at 35% according to the Economic and Social Research Institute (ESRI).
There are signs that the planned system can help to support businesses to meet their talent needs which is a key challenge facing many businesses due to a tight labour market. Nearly two thirds (64%) of business leaders state that the scheme provides an opportunity to review and enhance their organisation’s employee value proposition, which can in turn help to attract and retain top talent.
Speak to our team today to hear how Aon can support your organisation to successfully navigate the introduction of pension auto-enrolment and make better decisions for your people amid a rapidly changing pensions landscape.
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