Jan 2020

28

Your concerns about auto- enrolment addressed

Finally, after years of promises, the Irish Government has set a date for auto- enrolment to be rolled out in Ireland in the year 2022. It’s exciting news because it has been apparent for a long time that the current State pension is just not enough to have a decent standard of living. But while the need for auto- enrolment is unanimously agreed upon, people still have opinions on the means of delivering it.

Look, it was never going to be easy. Regina Doherty, Minister for Employment Affairs and Social Protection (aka the woman behind the wheel) has previously described auto- enrolment as “perhaps the most fundamental policy reform in a generation”. Not an easy feat! With such a momentous task there will always be a diverse range of feedback, which is a polite way of saying that people have some concerns.

So what are these concerns? While there are valid opinions from actuaries and the like, I want to just concentrate on us little folk; the regular Joes and Jills and how auto- enrolment may affect us. The most resounding criticism at this level is the exclusion of certain groups of workers, including those under 23 or over 60, those earning below €20,000 and the self-employed. However, although not automatically enrolled, members of these groups would still be able to opt in to the system.

A lot of people are also wondering about the State pension - isn’t it enough? Well, the answer is no. Although promised in the past, the State pension has still not increased in line with wages or inflation and let’s face it, €12,000 a year won’t be enough for a bag of cough drops and a couple of pints in a few years, let alone a decent standard of living!

The number of people over 65 in Ireland is set to double in the coming years, and it’s estimated that two- thirds of them are currently employed and do not have a workplace pension. Don’t worry, the State pension won’t be gotten rid of altogether. Auto- enrolment is seen as a top-up, starting at the proposed 1% of your wages, and rising to 6% after 10 years. With employers required to contribute the same amount, 12% of your salary will be going towards your pension pot. Not bad right?

And what about employers? “How much is this going to cost me?” and “How much extra work is involved” I hear them grumble. While it’s true that employers will have the additional financial cost of contributing towards their employees’ pension schemes, it doesn’t mean it has to break the bank. If you’re fortunate enough to use a good payroll software then this will handle and automate the administrative duties for you. If you aren’t fortunate enough then let me tell you about BrightPay.

With BrightPay it’s simple. We have the experience to guide you through the process, having already rolled out a similar system in the UK. BrightPay will automate auto- enrolment duties at no additional cost. All BrightPay payroll packages will include auto- enrolment plus free phone and email support to help you through your auto- enrolment journey.

Like it or not, auto- enrolment is on its way. It’s normal to have doubts and concerns, but given our savings rates, demographics and the increasing number of people who rely on State pension, then auto- enrolment is definitely the right path for Ireland and all of us future golden oldies.

BrightPay Payroll Software will be able to seamlessly cater for Auto Enrolment without any additional costs to the software, and also includes free phone and email support.


 

Posted byAoibheann ByrneinAuto EnrolmentPayrollPayroll Software


Jul 2019

11

Auto Enrolment: More payroll changes on the way for Ireland

The government has announced major changes to the pensions system in Ireland, including State, private and public service pensions, which aims to address Ireland’s significant retirement savings gap.

The Taoiseach confirmed that the Government's key goals are to "create a fairer and simpler contributory pension system where a person's pension outcome reflects their social insurance contributions, and in parallel, create a new and necessary culture of personal retirement saving in Ireland".

From 2020, a new State pension system will come into place based on a ‘total contributions approach’ (TCA) where a person’s lifetime contribution will more closely match the benefit they receive. Under TCA, a person's contributory pension will be proportionate to the contributions they make, with fair regard for periods of child rearing, full time caring, and periods in receipt of social protection payments.

Although the State pension will be reformed and will remain at the core of the pension system in Ireland, a new retirement savings system is still needed to supplement the State pension.

Minister Regina Doherty said: “It is increasingly evident that most Irish workers are not saving enough, or indeed at all, for their retirement years. Many people will be faced with a serious reduction in their living standards when they retire – a fall in income they clearly do not want.”

This new 'Automatic Enrolment' retirement savings system will be introduced from 2022 to support and encourage personal savings provision. It is intended that employee savings in this scheme will be supported by employer and State contributions.

Under this system, workers will be ‘automatically enrolled’ into a workplace pension scheme with the option to opt-out, should they choose to do so. However, looking at the international experience of similar systems, for example in the UK, once enrolled, workers tend to remain in the scheme.

Automatic enrolment is a natural extension of the payroll process, making more sense for employers to process the majority of these duties within their payroll software. At BrightPay, we have experienced the rollout of auto enrolment in the UK first hand, where we introduced auto enrolment features which enabled users to automate and simplify the entire process.

BrightPay Payroll Software will be able to seamlessly cater for Auto Enrolment without any additional costs to the software, and also includes free phone and email support. 


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Posted byRachel HynesinAuto Enrolment


Apr 2018

12

A Roadmap for Pensions Reform

The government has announced major changes to the pensions system in Ireland,
including State, private and public service pensions, which aims to address Ireland’s significant retirement savings gap.

The Taoiseach confirmed that the Government's key goals are to "create a fairer and simpler contributory pension system where a person's pension outcome reflects their social insurance contributions, and in parallel, create a new and necessary culture of personal retirement saving in Ireland". 

From 2020, a new State pension system will come into place based on a ‘total contributions approach’ (TCA) where a person’s lifetime contribution will more closely match the benefit they receive. Under TCA, a person's contributory pension will be proportionate to the contributions they make, with fair regard for periods of child rearing, full time caring, and periods in receipt of social protection payments.

Although the State pension will be reformed and will remain at the core of the pensions system in Ireland, a new retirement savings system is still needed to supplement the State pension.

Minister Regina Doherty said: “It is increasingly evident that most Irish workers are not saving enough, or indeed at all, for their retirement years. Many people will be faced with a serious reduction in their living standards when they retire – a fall in income they clearly do not want.”

This new 'Automatic Enrolment' retirement savings system will be introduced from 2022 to support and encourage personal savings provision. It is intended that employee savings in this scheme will be supported by employer and State contributions.

Under this system, workers will be ‘auto enrolled’ into a workplace pension scheme with the option to opt-out, should they choose to do so. However, looking at the international experience of similar systems, for example in the UK, once enrolled workers tend to remain in the scheme.

Automatic enrolment is a natural extension of the payroll process, making more sense for employers to process the majority of these duties within their payroll software. At BrightPay, we have experienced the rollout of auto enrolment in the UK first hand, where we introduced auto enrolment features which enabled users to automate and simplify the entire process.

BrightPay Payroll Software costs €149 + VAT per tax year for a single employer licence, and also includes free phone and email support. Before the introduction of auto enrolment, payroll administrators will be faced with even more changes to the payroll process with the introduction of PAYE Modernisation in January 2019. BrightPay will be able to seamlessly cater for both PAYE Modernisation and Auto Enrolment without any additional costs to the software.

 

Thesaurus Payroll Software | BrightPay Payroll Software

 

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Posted byRachel HynesinAuto EnrolmentPAYE Modernisation


Nov 2017

2

Auto Enrolment Planned for Ireland by 2021

Taoiseach Leo Varadkar said that the Government will publish a five year roadmap for pension reform before the end of the year. This will include the introduction of an auto-enrolment pension scheme for private sector workers, two-thirds of whom currently have no occupational pension to supplement their state pension. The first payments are expected to be made into new individually held funds by 2021.

He said the government would “work closely and consult with employers” in designing the new scheme. The Minister for Employment & Social Protection Regina Doherty, said that there will be no discrimination in the new auto-enrolment pension scheme proposed by Taoiseach Leo Varadkar.
“You can’t discriminate somebody that’s earning 20 grand to somebody that’s earning 40 grand,” said Minister Regina Doherty.

“But it’s always going to be based on the percentage, so whatever percentage you put in, the employer will put in a percentage and the State will put in a percentage, and we have to work out the details as to what that percentage will be.”

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Posted byCaoimhe ByrneinAuto Enrolment


Sep 2017

26

New Automatic Enrolment Pension System to be in place by 2021?

With better living standards and expanding economy, it is without doubt that Irish people are now living longer and we have a much healthier society. At the same time, we need to face the fact that with the Irish population inevitably getting older, there is the prospect that senior citizens will have to stay in employment long after they have passed retirement age. It is therefore absolutely vital to address the funding of the Irish pension system now if we want our pensioners to be well-protected in the future.

To tackle this issue, Brian Hayes MEP has called on Minister for Social Protection Regina Doherty to start work on the introduction of an automatic enrolment pension system, whereby all Irish private sector employees would be automatically enrolled into a pension scheme. As Mr Hayes stated, "a road map needs to be put in place for the introduction of an auto-enrolment system for all Irish businesses. The Cabinet needs to make it a priority to ensure that auto-enrolment is put into Irish Law by 2021. This is something that can be done through cross-party agreement."


In 2012, the UK introduced an automatic enrolment system which is working well and providing long-term sustainability. Automatic enrolment systems have also been introduced in Australia and New Zealand, and similar systems exist in the Netherlands, Sweden and Denmark. These countries are recognised as world leaders in pensions.


Mr Hayes has suggested that Ireland should create its own system, whereby every employee will be automatically enrolled into a pension scheme, into which they should contribute at least 1 per cent of their monthly salary, to be matched by their employer.


Mr Hayes also added, “In Ireland we are far too dependent on our state pension system. We have a very low take up of workplace pension schemes. Less than 40% of Irish workers are covered by a workplace pension scheme. The best way to deal with both of these problems is through an auto-enrolment system which reduces dependency on the state system and ensures people have additional pension pots built up.”


A recent global study called the ‘Melbourne Mercer Global Pension Index’ has stated that Ireland's pension system is good but has serious sustainability problems into the future. Elsewhere, Mercer's report found that Ireland will increasingly struggle to afford the provision of a guaranteed pension for everyone, if the current pension system isn’t addressed.




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Posted byAlena AmelyanchukinAuto Enrolment


Feb 2014

14

What might be coming down the tracks for Irish employers

Here is an article that recently appeared in the online version of Business & Finance and that should be of interest to all Irish employers.

http://businessandfinance.com/whats-coming-down-the-track-for-irish-employers/?ref

 

Posted byPaul ByrneinAuto EnrolmentPayroll SoftwareRTI


Jan 2014

22

Will Ireland ever follow the UK lead and adopt auto enrolment?

Thankfully, we are living longer! This, however, presents a huge challenge for any country’s retirement strategy. Back in 1950, there were 7.2 people aged 20–64 for every person of 65 or over in the OECD countries. This is projected to reduce to 1.8 by 2050. The math is stark. To fund a state pension which pays modern day equivalents to people retiring at 65 will soon become an impossible task. Apart from increasing the already huge tax burden to pay for pensions, there are really only two ways of addressing the problem. One, the retirement age needs to increase and, two, people will need to have private pensions or other incomes to supplement their state pension.

Auto Enrolment addresses the latter. It imposes a legal obligation on employers to enrol their employees in pension schemes and to contribute to these pensions. A deduction is made from the employee’s pay plus the employer contributes as well. Auto Enrolment began in the UK for very large employers in 2012 and is being rolled out to include all employers by 2017. The combined minimum deduction and contribution of 2% is designed to ease employees and employers into the concept but this combined level rises to 8% by 2018.
It should be noted that employee participation is optional. The employer must enrol them but they may subsequently opt out. Therefore, employees who feel that they are otherwise covered (e.g. through rental property and/or other investments) do not have to partake in Auto Enrolment.

The various rules surrounding Auto Enrolment and the structures that need to be put in place are numerous and represent a major undertaking for government, employers and pension companies.

Auto Enrolment (or similar) is an absolute necessity and it is somewhat surprising that Irish plans in this regard are not more advanced.

Posted byPaul ByrneinAuto EnrolmentPayroll Software