Irish Life welcomes the Government’s approval for progress on New Automatic Enrolment Retirement Savings Scheme

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Irish Life welcomes the Government’s approval for progress on New Automatic Enrolment Retirement Savings Scheme

Irish Life has welcomed Minister Doherty’s announcement on the key elements of an auto enrolment pension scheme.

The Government’s Roadmap for Pension Reform 2018 – 2023 set out an ambitious reform plan.  However-perhaps because of Brexit pressures - the plan appeared to have stalled and key target dates have been missed.

Shane O'Farrell, Irish Life Corporate Business, said: “Hopefully, the Minister’s announcement will put the project back on track and inject a new sense of urgency into the plan.  While progress has been made on many aspects of the scheme, the decision does not address some issues which will be critical to the successful introduction of an Auto Enrolment Scheme.

Importantly, no decision has been made on how tax relief will be applied, and greater clarity is needed on the respective roles of the Central Processing Agency and the Registered Providers who will provide a suite of retirement savings options.

Nonetheless, the Minister’s announcement is a very positive step forward and Irish Life looks forward to early decisions being made on these outstanding issues.”

The case for pension reform is incontrovertible.  Ireland has an ageing population.  We are living longer and enjoying a better quality of life. A 65-year-old female in Ireland has a 50% chance of living beyond 91.  A male aged 65 has a 50% chance of living beyond 87.  Because of this, the population of over 65s is expected to double by 2045. 

Shane O’Farrell added “Experience in the UK suggests that this is a public policy which deserves priority.  A recent report by the UK Pensions Regulator on Britain’s auto-enrolment scheme revealed 10 million more people are now saving, with record amounts going into pensions.

In its first year-2012-around 1 million workers were brought into the scheme, but these numbers rose to 6.2 million in 2016 and has now hit 10 million. Less than half of private sector workers had a pension in 2012, but the figure has now reached 85%.”

 

Article Published: 31/10/2019