Today, we are all living longer healthier lives. However, as a nation, we are not saving enough for our retirement. Many are planning to rely solely on their state pension which could lead to a reduced standard of living. To combat this issue, the Irish government aims to bring in an auto enrolment system where all employers would enrol their employees into a workplace pension scheme and contribute towards the employee pension pot. The details for auto enrolment are still being ironed out by the government, but it is hoped that the process will begin in the next few years.
Similar legislation was brought into the UK in 2012, where millions of employees are now saving towards their retirement. In the UK, eligible employees who meet certain criteria are automatically enrolled into a workplace pension scheme. Both the employer and the employee must pay minimum contributions into the pension pot. All other employees have the right to join or opt in to the workplace pension scheme, depending on their age and earnings.
In Ireland, all employers are likely to have certain mandatory duties to complete, such as choosing a workplace pension scheme, correctly informing employees about their rights, calculating who needs to be enrolled into a pension scheme, calculating contributions, processing these payments through payroll software, showing contributions on employee payslips and completing a declaration of compliance to inform the Irish government that you have complied with the law.
How much will auto enrolment cost me?
Employers will have the additional financial cost of contributing towards their employee’s pension scheme. However, any good payroll software will handle and automate the administrative duties. If your accountant or payroll bureau processes payroll for you, they may look to charge you for the additional administrative work involved in calculating and implementing auto enrolment on the payroll.
Be aware of any payroll software provider who looks to charge extra for automatic enrolment. In the UK, many of the larger providers have opted to charge their customers for auto enrolment functionality in addition to the cost of their payroll software. This drives up the cost of implementing the new pension reform considerably for employers and payroll bureaus.
With BrightPay, there will be no additional charge for any of the auto enrolment features. All of this will be included as part of your payroll software package plus free customer phone and email support.