Delaying auto-enrolment pensions ‘is not an option’

DELAYING pension auto-enrolment any further to help businesses who are struggling with inflation and other pressures is ‘simply not an option’, the Social Protection Minister has said.

Heather Humphrey’s remarks come as Ibec, the country’s largest business lobby group, warned last week that changes in Government policy, including auto-enrolment, would add more than €4billion annually to the wage bill of employers.

The issue of rising costs for businesses has been the subject of discussion at multiple meetings of both Fianna Fáil and Fine Gael parliamentary party meetings in recent weeks.

However, Ms Humphreys confirmed yesterday that auto-enrolment would begin this year, despite some scepticism within the industry.

She said: ‘I’m here today to tell you all, loud and clear – 2024 is going to be the year Auto Enrolment (AE) is delivered.

‘I’m conscious too that the Government’s plans for the introduction of an AE system have been the subject of much commentary and debate in recent months. I want to be very clear that I understand some employers have concerns about the introduction of AE.’

She said: ‘As a former Minister for Business, who talks to employers every week, I know that it is a challenging time for many small businesses right now.

‘Employers are facing pressures on a number of fronts – be it high inflation, a significant increase in the minimum wage, the introduction of Statutory Sick Pay and now the roll-out of Auto-Enrolment.

‘But in truth, we have to weigh all this up against the fact that putting off the introduction of Auto-Enrolment for another few years just simply is not an option.’

Ms Humphreys said that ‘irrespective’ of the prevailing economics, there is a ‘pressing need’ to increase pension coverage and pension adequacy for workers because most private sector employees are not saving for their retirement.

She said people without supplementary retirement savings ‘may face significant and unwanted reductions’ in their living standards in their retirement years.

The minister said the tender process for those firms interested in running the system would be sent out this week.

She said that auto-enrolment represented the biggest reform of the pension system ‘in the history of the State’.

Ms Humphreys said that the new system will turn the existing one on ‘its head’ to one where people will have to consciously ‘opt-out’ of supplementary pension coverage rather than ‘opt in’.