Ireland's Plan for Pension Auto-Enrolment: What You Need to Know

Finally, Ireland looks set to introduce a pension auto-enrolment system, now scheduled for 1 January 2026 after multiple delays since it was first proposed in 2018. The scheme aims to supplement the state pension, not replace it. Auto-enrolment automatically enrolls employees in a pension scheme, with contributions from the employee, employer, and government. The fear is that future governments may use auto-enrolment as an excuse to cut state pension entitlements due to the current unsustainable state pension system.

The state pension in Ireland is about €15,000 per year, which may not be sufficient for retirees. Auto-enrolment is designed to provide an additional pension on top of the state pension, improving retirees' financial situation. However, concerns arise that future state pension payments may decrease for auto-enrolment savers as the state pension system faces challenges due to an aging population.

To address this, the government could implement legal measures to ensure the state pension's value does not diminish over time. Options include a guarantee similar to the UK's 'Triple Lock' or benchmarking and indexation to maintain the state pension's value. These measures, if implemented, would provide younger workers with more confidence in receiving a decent state pension alongside their auto-enrolment savings.

According to the source: The Journal.