The landmark auto-enrolment scheme is designed to provide a pension plan for thousands of workers and is due to be rolled out next year after delays to its start date.
But more than four in 10 adults across the country without a pension have never heard of what is set to be Ireland’s first-ever mandatory pension scheme for workers who are not currently contributing to a pension.
A survey commissioned by insurance broker Gallagher discovered the lack of awareness of the auto-enrolment scheme among those it is intended to benefit.
The survey was conducted by iReach on a representative sample of 1,000 adults nationwide.
It aimed to assess public recognition and knowledge of the new legislation delivered by Social Protection Minister Heather Humphreys in July.
Auto-enrolment (AE) will impact over 800,000 workers who are not currently in a pension scheme.
The survey found 86pc of existing pension holders have some awareness of auto-enrolment; 58pc say that although they have heard of it, they do not know much about it; while 42pc of people without a pension have never heard of auto-enrolment.
And 44pc of those who have some knowledge of it say they don’t know very much about it.
“The very group that the AE scheme is designed to help is the least informed and engaged on the issue,” Jonathan Roche-Kelly, director of financial services for Gallagher in Ireland, said.
“Looking at the feedback from people who don’t have a pension, we really start to appreciate just how much more needs to be done for auto-enrolment to be seen as a positive by those it is intended to support and to ultimately be a successful endeavour.”
Experts at Gallagher described auto-enrolment as a monumental development in Ireland’s retirement landscape.
Mr Roche-Kelly said it has real potential to address the country’s pension coverage gap by automatically enrolling workers without existing pension plans.
“The aim of this initiative is laudable and could go a long way towards ensuring a more inclusive and equitable retirement system, compelling more people to save and reducing future reliance on the State pension.”
He said the scheme is designed to provide greater financial security in retirement and support the long-term sustainability of Ireland’s ageing population.
“But it is imperative that employees are brought along in the roll-out,” he added.
Jonathan Roche-Kelly, director of financial services for Gallagher in Ireland, said scheme’s aim is ‘laudable’
The scheme has been 20 years in the making and was due to be put in place by the end of this year.
However, the Department of Social Protection has admitted it will be next year before auto-enrolment is put in place. The launch of the scheme has been repeatedly promised but delayed over the last few years.
Under the plan, employees without a pension will be automatically enrolled into a savings scheme which will be partially funded by businesses.
It is estimated that only around one-third of private-sector employees have active pension coverage. Auto-enrolment will put employees between the ages of 23 and 60, and who earn over €20,000 a year, into a workplace scheme.
At the beginning, contributions will be set at a rate of 1.5pc of a worker’s gross income, which will be matched by the employer and topped up by the State.
The contributions will automatically increase every three years by 1.5 percentage points, before reaching a maximum of 6pc by year 10.
For every €3 saved by an employee, the State will add €1.
