Plans to bring in an auto-enrolment scheme for pensions will be brought to Government within weeks, Minister for Social Protection Heather Humphreys has said.
However, she said there is “a good deal of work” to do to get the scheme up and running and the target for this is the end of 2023.
The original deadline of the start of 2023 has previously been shelved due to the pressures of Covid-19 and there are doubts in the pensions industry that the scheme will happen.
Around 55 per cent of employees have supplementary pensions provision and this falls to 35 per cent in the private sector, meaning large numbers of people rely solely on the State pension for retirement income. Under auto-enrolment, an employer would be obliged to offer a pension plan to an employee, who would be automatically signed up.
A recent Independent Trustee Company survey of pension advisers found 56 per cent believe there will be a delay of one or two years, while a further 38 per cent say auto-enrolment will simply “not happen”.
At a press conference on Monday, Ms Humphreys was asked about the delay to the scheme and scepticism in the industry that it will be brought in.
“This is something that I’m totally committed to. A lot of work has been done on it,” she said. “I have already brought it to the Cabinet sub-committee and I will be bringing a full a full memo to Government in the next two weeks.”
Ms Humphreys said it will “take a while to set it up” and it will require legislation. She said “the target is by the end of 2023 it’ll be up and running” and she expects to make an announcement on this “very shortly”.
Separately, Ms Humphreys said there are “difficult decisions” to be made surrounding the qualification age for the State pension.
Competing political promises over when someone should qualify for the State pension were one of the key debates in the 2020 general election.
It led to the Coalition deferring the planned rise of the pension age to 67 - which was due to happen in 2021 - while the Pensions Commission considered the issue.
In its report the Commission suggested the pension age should rise in steps to 67 by 2031 and then to 68 by 2039.
Earlier this month the Oireachtas Committee on Social Protection said the age should not rise beyond the current qualification age of 66.
Ms Humphreys said the Commission on Welfare and Taxation is due to deliver a report on the Pensions Commission proposals at the end of the month and ultimately the Cabinet will make a decision on the future of the pension age.
She said at the moment there are four and a half people working per pensioner but by 2050 there will be just two people working per pensioner and she added: “that’s not sustainable.”
Ms Humphreys said: “It’s a complex issue. There’s a lot of difficult decisions to make here. There’s no easy choices. You can’t cherry-pick what you like and leave out the bits you don’t like.
“There’s decisions to be made, and they will be made.”
