Confirmation from the Minister for Social Protection that pension auto-enrolment (AE) will come into effect on September 30th 2025 has received a qualified welcome from representatives of both workers and smaller businesses.
Heather Humphreys said on Sunday that the Government had agreed the date and that further details would be announced this week as part of the budget.
Speaking on RTÉ's This Week programme, she said the move would mean people had “more money and more comfort in their retirement” and would be “good for the economy, good for businesses and good for society”.
Under the terms of the scheme, which applies to workers aged between 23 and 60 who earn at least €20,000 per annum across one or more jobs, employers and employees will each initially contribute 1.5 per cent of gross earnings to the individual’s pension pot, with the Government adding a further 0.5 per cent.
The contributions are due to increase in stages before reaching 6 per cent, 6 per cent and 2 per cent respectively in 10 years’ time.
Reacting to the news that the scheme will come into operation next September, Laura Bambrick of the Irish Congress of Trade Unions gave a qualified welcome. “The 20 years wasted talking about auto-enrolment is highly regrettable, but we welcome that workers and their employers finally have a start date,” she said.
“Pension auto-enrolment has transformed pension coverage in Britain. In the years since it was introduced in 2012, the proportion of employees with an occupational pension went from 47 per cent to 79 per cent.
“The September start date will mean savers will not be able to opt out until March 31st, 2026, at the earliest, after the mandatory six-month enrolment period ends. This removes the temptation to opt out of saving for retirement and have your 1.5 per cent gross wage contributions reimbursed around the expensive Christmas period, which would happen if the start date had been the summer months.”
She said the widely flagged cut to USC would cushion the effect of initial pension contributions if it is confirmed in the budget.
ISME’s Neil McDonnell, meanwhile, said it was welcome that a date had been fixed, although he hoped the cost involved to employers would be factored into other decisions taken by Government.
“We hope that gives final clarity on the date of introduction, which has been postponed many times,” he said. “We are in favour of AE, because so many private sector workers lack pension coverage. But Government must recognise that this is an immediate 1.5 per cent payroll increase, before they consider adjusting the national minimum wage, 100 per cent of which is covered by AE.”
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