Auto-Enrolment progress at last
The Irish Government published design principles for their newly proposed Auto-Enrolment (AE) Retirement Savings Scheme.
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Shane O’Farrell, Director of Products at Irish life Corporate Business, says: “Always a strong advocate for auto-enrolment, Irish Life is thrilled to see some real progress being made in this space, finally. Socially progressive and forward thinking, the introduction of an auto enrolment system will represent a major milestone in tackling pension planning and improving pension coverage across Ireland. |
However, there are aspects of the latest proposal that need serious review, and we have a lot of outstanding questions about some of the big picture elements, such as the exact governance model used to ensure best customer outcomes.
We also have some major concerns from the member’s perspective when it comes to elements like the new incentive structure and the very low initial level of AE contributions, as well as the limitations of the offering around things like fund choice, contributions, retirement age, death benefits.
As a leading pension provider, a particular concern we have from the member perspective is the apparent absence of member supports, such as the availability of guidance and advice from financial experts along the retirement journey – but particularly at retirement - which our experience tells us is pivotal.
At Irish Life, we fully support the introduction of auto enrolment in Ireland as the way forward. But we do believe that the success of the initiative requires that a well-conceived approach is developed from the outset.
We’ve seen from renowned systems in the UK and New Zealand, that where AE is done right – and pivotally, where it’s made easy for people - it’s widely accepted and very successful. So, we’re looking forward to joining the AE conversation and helping to shape this new system in any way we can."
We know that many people working in the corporate benefit space are probably wondering how the new AE scheme will actually compare to existing DC plans and master trusts. So, we have used the Government’s design principles to collate a brief comparison of the new AE scheme versus existing workplace pensions (both DC plans and master trusts) across some key features, such as tax relief, criteria for inclusion, contribution rates, AVCs, fund choice and retirement age.
