Yesterday, the Dept of Welfare launched a consultation process on the introduction of auto-enrol pensions in Ireland. It’s not due to commence until 2022 but here are some of the main points:
Employee to contribute 6% of their gross salary (starts at 1% in yr 1 and ramps up to 6% over 6 years)
Employer to contribute 6% each up to €75,000 gross salary (same ramping up as above)
Government will contribute €1 for every €3 contributed by employee
Automatic enrollment for any one aged 23 -60 and earning over €20k
Can apply to leave in month 8 and 9 but will automatically be enrolled again in 3 years time
This won’t impact your eligibility to the State pension
Self-employed can opt in
A Q&A on the proposal
independent.ie/business/per … 43254.html
Now one major question I would have is with regards to the current pension relief which is at the marginal rate of 40% for those earning over 35k. Is that about to go to be replaced with the 25% rate mentioned above? Is that the long term thinking of the Govt here?
If yes, that’s going to make a lot of people think hard about putting money into pensions.