CSO pensions survey of workers reaffirms the case for Auto-enrolment - ICTU
6 Jan 2020
CSO figures released today on pensions coverage show half of workers (50.4 per cent) are actively saving towards their retirement through an occupational or private pension, an increase of just over three percentage points when compared to the same period in 2018 (47.1 per cent).
Of those workers not currently saving in an occupational pension scheme, more than half (53.2 per cent) stated that their employer does not provide a pension.
Where employers did offer an occupational pension but workers had not to join the scheme to save for their retirement, the most common reason given (36.2 per cent) was “never got around to organising it”.
Six in ten workers with no second pension reported having no alternative source of future income and that they will rely on the State pension in retirement.
The Irish Congress of Trade Unions social policy officer Dr Laura Bambrick said: “Congress has been to the fore in highlighting the serious need for radical reform in supplementary pension policy.
“Current policy has failed to encouraged low and middle-income earners to save enough towards a financially secure retirement, and there is no legal obligation on an employer to provide or contribute to an occupational pension scheme for their employees.
“As the State pension is paid at a flat-rate, rather than earnings-related, workers without retirement savings are exposed to a significant drop in their living standards in old age.”
Two years ago, in February 2018, government published an ambitious five-year plan for pension reform. One of the strands focuses exclusively on improving supplementary pension coverage through the introduction of a system of auto-enrolment.
Dr Bambrick said: “To address the lack of adequate pension provision and the unwillingness of employers to contribute to their workers’ income in old age, Government plans to follow international best practice for boosting pension coverage by legally requiring employers to automatically include their staff into a retirement savings scheme.”
However, “Congress is disappointed that the details of five main features of the scheme are still not confirmed, including details of the State’s contribution to workers’ pension savings,” she said.
In her interview on Morning Ireland on Thursday 31 October, following formal Cabinet approval to introduce the auto-enrolment, Minister Doherty stated she expected to have these details ready to go to Cabinet for approval before the end of the year. This has not yet happened.
Congress general secretary Patricia King added: “Congress agrees in principle with the introduction of auto-enrolment as a means of increasing pension coverage, income adequacy for retirees, and employer responsibility to contribute to their employees’ retirement savings.
“Today’s figures from the CSO reaffirms the already strong case for auto-enrolment and Congress is calling on Government to ensure that it meets the ambitious deadlines the Department of Employment Affairs and Social Protection committed to for its introduction.”