Employers call for rethink on level of contributions to mandatory workplace pension

4 days ago 19

Employers’ radical Ibec is calling for changes to planned authorities that volition enactment mandatory workplace pensions successful place.

Contribution levels to the projected auto-enrolment pension strategy should beryllium looked astatine again, with competitiveness and affordability reviews completed earlier contributions are accrued from their introduction level, Ibec enforcement Fergal O’Brien volition archer an Oireachtas committee connected Wednesday.

The strategy foresees employers and workers each putting 1.5 per cent of the employee’s gross wage into the strategy astatine the outset, with the fig rising to 3 per cent, 4.5 per cent and yet 6 per cent aft the strategy has been operating for four, 7 and 10 years.

Auto-enrolment pension strategy apt to miss ‘ambitious’ 2024 target, officials fear ]

“We are acrophobic astir the standard of contributions required for some employees and employers,” Mr O’Brien, Ibec’s enforcement manager of lobbying and power volition accidental successful his opening code to the committee. “Contribution costs volition contiguous a important affordability situation for galore workers, peculiarly arsenic they proceed to conflict with cost-of-living challenges portion employers person faced a raft of State and market-related labour-cost increases successful caller years and this volition adhd further to competitiveness risks facing Irish business.”

The Oireachtas Joint Committee connected Social Protection, Community and Rural Development and the Islands is examining draught proposals for a strategy that volition automatically enrol workers betwixt the ages of 23 and 60 earning much than €20,0000 a twelvemonth into a workplace pension scheme. The Government has committed to person the strategy up and moving by aboriginal 2024 though Department of Finance officials person present formed doubts connected whether that timeline is achievable.

Mr O’Brien volition besides telephone for the auto-enrolment of self-employed people, who Ibec says marque up 16 per cent of the moving population, successful the pension strategy connected the ground that lone astir 30 per cent of this radical had idiosyncratic pension cover.

Workers merit consecutive answers connected pension promise ]

But it objects to the existent €80,000 wage headdress connected which employers and workers volition person to wage contributions, claiming it is excessively precocious and the strategy “should beryllium much focused connected gathering contributions for entry-level, low-cost savings”.

He volition accidental that Ibec is “particularly concerned” astatine the program to automatically re-enrol workers who opt retired of the strategy aft 2 years, alternatively than 3 arsenic primitively proposed, arguing that it would enforce “an excessive administrative load connected employers” and suggesting that the deficiency of a waiting play earlier enrolment could undermine existing occupational pension schemes.

Despite Ibec’s reservations, it remains a “strong advocator for automatic enrolment”, helium volition say, with pension sum extracurricular the State pension “stubbornly low, contempt argumentation announcements by successive governments implicit the past 20 years”.

Failure to present a strategy to broaden concern pension sum volition “risk doing superior harm to our user system leaving a procreation with substandard pensions sum and an unsustainable measure for the State”, the employer’s radical volition archer the committee.

Read Entire Article