7 Things To Know About Automatic Enrolment

Minister Heather Humphreys has announced the publication of landmark legislation for the Automatic Enrolment Retirement Savings System, a move we have long been waiting for. With around 800,000 workers set to join a new retirement savings scheme from January 2025, this marks a pivotal moment in supporting individuals during their retirement years. Here are our top 7 things you need to know about Automatic Enrolment:

7 things to know about Automatic Enrolment

• Trust Matters welcomes the progress being made in relation to Automatic Enrolment. Whilst employers do need to be ready for Automatic Enrolment, there is no need to panic! The most significant preparation needs to be done by your payroll departments or payroll partner to ensure their systems can cater for the new system.
• This announcement has clarified that where employers already operate a pension solution, they will not immediately be subject to Automatic Enrolment ‘minimum standards’; these are to be introduced in future years. Until then Employers will be able to determine plan membership terms.
• However, employers will not be able to force employees to contribute to their pension solution for Automatic Enrolment purposes (e.g. access to a salary deducted PRSA). Employees who do not consent to pay contributions, where the employer is also not contributing, will be automatically enrolled into the central state system and as such avail of the Employer 1.5% contribution.
• As such, where an employer operates an eligibility period (i.e. a probationary period) prior to allowing employees join their pension solution and benefit from an Employer contribution, consideration should be given to redefining eligibility criteria for joining the existing pension solution.
• Employers could consider making it compulsory for Employees to join the existing Pension Solution (New Employee Contracts will be required in some instances) or to provide voluntary access to the Employer Scheme immediately on joining service. This immediate entry could be at a reduced Employer and Employee contribution rate for an initial period i.e. like the Automatic Enrolment contribution rates of 1.5% ER 1.5% EE.
• Alternatively, if an Employer wishes to adopt a “do nothing” approach, those employees not already participating in the employer pension solution will be automatically enrolled in the central state system. This however may lead to additional administrative and compliance obligations for the employer. It remains to be seen how onerous this burden may be.
• As each employer and pension scheme differs, it is imperative to seek advice and guidance in relation to all options available.

You can read the full press release on the publication of the legislation for the Automatic Enrolment Retirement Savings System from Minister Humphreys’ office here. And if you have any questions about auto-enrolment, please feel free to drop fionan@trustmatters.ie a note.

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