Auto-Enrolment (AE): The Expert's View from the National Pensions Summit 2024

Only 40% of attendees at the National Pensions Summit rated their business as ‘prepared’ for AE. So, let’s take a closer look at what the Summit experts felt businesses need to be thinking about before the State’s AE rollout, which the Minister forecast for Q4.

Though the Minister said that the administrative burden associated with AE would be shouldered largely by the Central Processing Authority (CPA), and not by employers, Paul Leandro - Partner at Barnett Waddington - spoke of the UK experience and advised any employers who are contemplating rolling out the AE model within their business to ensure they do not underestimate the scale of what is involved, particularly from a payroll and HR system perspective.

Other pros and cons of the Irish AE model were examined by a diverse range of experts, with the simplicity of the Irish AE model design noted as a positive, but quite a few negatives also being highlighted, including:

Two different bonus systems in place will be confusing for all stakeholders.

Anyone paying tax at 40% is much better off in a corporate plan than the AE model.

The system does not facilitate early or late retirement, which is not in keeping with current workplace trends. 

The system does not facilitate AVCs to allow members to boost their fund, which raises adequacy concerns, particularly for women in light of the gender pension gap.

There is an absence of member engagement support and advice for members - even as they get very close to the all important ‘life after work’ stage - which underscores the aforementioned adequacy and education concerns

What does this mean for you?

The consensus in the room was that, although AE will give a much-needed boost to pension coverage in Ireland, many businesses with a strong existing pension plan in place already may find the AE model lacking by comparison in terms of pension adequacy due to the lack of flexibility and the absence of key supports that it offers members.

At Irish Life, we are already seeing many of our clients - particularly those with a strong workplace benefit focus - looking to open up their existing pension plans to meet their AE compliance requirements ahead of the State’s AE rollout and negate any impact on their business altogether.

To find out more about using your existing Irish Life Pension Plan to meet your AE compliance requirements, reach out to us today at AEready@irishlife.ie