There is overwhelming public support for the planned introduction of a mandatory workplace pension scheme, but it could still face initial pushback, a new survey has found.
More than four in five adults support the proposal to auto-enrol workers aged between 23 and 60 and earning more than €20,000 into an occupational pension plan if they are not already in one, according to the survey by life insurer and pensions specialist Royal London Ireland.
The scheme is scheduled to be up and running by next year, though there are doubts that the Government can meet the latest of its much delayed targets, not least because of the looming prospects of a general election in the autumn. Business leaders have also called for the system to be phased in over an initial 12-month period.
Support for auto-enrolment is slightly up on last year, according to Royal London Ireland. But close to half – 46 per cent – of respondents expect some initial pushback before workers start to realise the benefits of the system.
Workers will initially pay 1.5 per cent of their gross salary into the scheme, a figure that will be matched by their employers, with the State adding a further third of the employee contribution. That means at the outset 3.5 per cent of gross salary will go into the scheme on the back of the employee’s 1.5 per cent contribution.
The figures will rise to 3 per cent in year four after the scheme is up and running, 4.5 per cent in year seven and 6 per cent in year 10. At that point annual contributions to the workers’ funds will be 14 per cent, of which 6 per cent comes from the workers’ pay.
Majorities in all age categories among the 1,000 surveyed by Royal London Ireland support auto-enrolment, with the figure highest among that over the age of 55, where 88 per cent of respondents back the scheme.
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There was also strong support for the pension plan among younger workers, with 85 per cent of those aged between 25 and 34 considering it a good idea.
Close to one in five people opposes the notion of auto-enrolment, with 9 per cent against the notion of workers being automatically signed up to a pension regardless of their views. On this women were slightly more likely to object.
Commenting on the survey findings, Mark Reilly, pensions proposition lead in Royal London Ireland, said: “It is imperative that private pension coverage in Ireland is improved otherwise a significant portion of the population could struggle financially when they reach retirement. Auto-enrolment should help boost pension coverage here and therefore has the potential to be a hugely positive initiative, particularly if inflexibilities around the scheme are addressed.”
He said the overwhelming support for the scheme was likely to cheer the Government as it works to put the necessary structures in place for auto-enrolment.
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