Thursday 14 November 2019

Strong support for mandatory pension scheme

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Charlie Weston

Charlie Weston

A large majority of PAYE taxpayers are in favour of a new automatic pension scheme being introduced for those who have no occupational pension.

The survey from tax specialists Taxback.com found that 84pc of people would be in favour of an auto-enrolment type scheme.

The Government has plans to bring in this type of scheme, with the Taoiseach recently telling the Dáil he intends to bring forward proposals for an auto-enrolment scheme. But he gave no time frame for this.

Auto-enrolment involves people being automatically signed up to a pension scheme and having to actively opt out of such an arrangement.

Only a third of private sector workers have a pension. This means an estimated one million workers will only have the State pension when they retire as they have no occupational scheme in place.

A study of the pension systems in this country, carried out by the Organisation for Economic Co-operation and Development in 2014, commissioned by the Government, recommended an auto-enrolment system.

The Taxback.com survey found most people here would be in favour of an auto-enrolment similar to the one in Australia.

That scheme sees 9.5pc of a worker's salary contributed by their employer into a retirement fund.

The survey was conducted among 800 of the tax firm's clients, and its findings are in line with other polls on the same subject.

Auto-enrolment was introduced in the UK in 2012. By the end of March last year, more than 6.1 million workers had been enrolled, an increase of nearly one million on a year earlier.

Barry Flanagan, of Taxback.com, said: "The results were pretty definitive - there would be widespread acceptance of a compulsory pension savings scheme in Ireland, though there may be some issues to iron out surrounding contribution rates."

A spokeswoman for Social Protection Minister Regina Doherty said it is intended in the coming months to publish and commence an action plan for pension reform, which will include a time frame.

Irish Independent

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