Minister for Social Protection Dara Calleary has signed into law new minimum contribution levels for current occupational pensions to qualify as exempt from the new auto-enrolment retirement saving scheme, to be known as My Future Fund.
The new rules require defined contribution occupational pension schemes to have a minimum total contribution of 3.5 per cent of employee gross earnings, capped at €1,200, including a minimum 1.5 per cent employer contribution. This will ensure that all pension arrangements are no less favourable as My Future Fund for employees.
Welcoming the prescribed standards to pension contributions to prevent employers sidestepping auto-enrolment on the cheap, Irish Congress of Trade Union general secretary Owen Reidy said:
“The main purpose for introducing auto-enrolment is to allow more workers have a more comfortable retirement with more money to spend on top of their state pension.
“Workers signed up to a defined contribution pension plan with contribution levels lower than the initial 3.5 per cent auto-enrolment contribution are being robbed of their right to an adequate retirement income and good employers being put at a competitive disadvantage.
“Congress and our member unions welcome the swift response to put a stop to efforts to sidestep auto-enrolment at the expense of employees’ financial security in old age.”
Mr Reidy added: “Given the large number of workers and employers coming under the scope of auto-enrolment, teething troubles are to be expected. But the swift action taken to close this loophole will boost public confidence in the operation of this vitally important scheme and what it is intending to achieve.”
