Auto-enrolment (AE) is a new savings and investment scheme for employees where financial returns are paid out to participants on retirement, in addition to the State Pension.
Who will be auto-enrolled?
Employees
aged between 23-60 Earn over €20,000 per annum Not already in a pension scheme
Currently excluded
Existing members of occupational pension and PRSA’s
Self – EMPLOYED, Non earning
System will be set up this year, with contributions set to begin in January 2025 at the latest. The National Enrolment Retirement Savings Authority will be set up to manage the system.
Contributions: Unlike a pension, you will not be eligible for tax credits for your contributions, instead you will get a state contribution.
Contributions are to be made by employers, employees and the State to a defined contribution arrangement which will be administered by a state-run Central Processing Agency. Contributions will start off small (1.5% employee, 1.5% employer and 0.5% from the State) and will increase over a ten-year period to a total of 14% of salary (6% employee, 6% employer and 2% from the State).
Investment: Members will have four different investment options to choose from which include a default option, a conservative option, a moderate risk option and a higher risk option. Those funds will be provided by four separate providers, however actual returns achieved for members in their chosen fund will be pooled based on the returns achieved by the four providers for that fund type. Automatically invested in the default lifestyle type fund. Investment returns are not guaranteed.Retirement: Access to the auto enrolment scheme will be linked to the age for state pension access which is currently age 66.
