Most pension advisers expect Government auto-enrolment plan to be delayed or to 'not happen' 

Those who said the plan would not happen said it was their expectation the Government would defer auto-enrolment through seeking reports, reviews and commissions

The ITC says it undertook the research to gain insight into attitudes towards the State’s pension policy changes that look set to take centre stage later this year or during 2022. file Picture

Over 90% of Irish pension advisors believe the Government’s auto-enrolment (AE) plan for those who only have the State pension to rely upon when they retire will be significantly delayed or may not happen at all.

The plan is currently slated to be rolled out in 2023, but new research from the Irish Trustee Company (ITC) found 56% of pension advisers believe AE will be postponed by one or two years, while 38% believe it will simply "not happen" at all.

Those who said the plan would not happen said it was their expectation the Government would defer AE through seeking reports, reviews and commissions.

The ITC says it undertook the research to gain insight into attitudes towards the State’s pension policy changes that look set to take centre stage later this year or during 2022.

'Thorny issue'

Glenn Gaughran of the ITC said the report’s findings give a sense of "just how much of a thorny issue pension provision has become, particularly since the last election when the Government chose to defer the planned increase in the pension age to 67 by establishing a pension commission and asking it to draft a report on the matter".

He said the Government’s strategy effectively enabled it to "avoid making a logical but unpalatable policy decision".

“Pension advisers are concerned that auto-enrolment will face the same decision-avoidance measures by Government, as its implementation will involve financial pain for both workers and employers,” he said.

The Government’s AE plan would see employers obliged to automatically enrol employees in a workplace pension scheme, with the employer, the employee and the State each contributing a small percentage of an employee’s salary to help finance retirement.

At present, Ireland is one of only two countries in the Organisation for Economic Co-operation and Development (OECD) without a mandatory earnings-related element to retirement.

"Most other countries have long since grappled with the fact that over half of employees in the private sector will end up completely reliant on the State pension and so have introduced these types of auto-enrolment programmes, to varying success, to try bridge the pension gap," Mr Gaughran said.

Plan a 'watered-down version'

Mr Gaughran said the Government's current AE plan is a "a watered-down version of those seen elsewhere, with all self-employed, all workers on incomes below €20,000, and all of those over the age of 60 excluded from the scheme.” 

Citing recent research from Eurostat, which listed the average life expectancy as 81 for men and 85 for women, Mr Gaughran said some people could be in receipt of their pension for anything from 15 years to 20 years.

“People are living longer, leaving a corresponding fiscal challenge for our current and future taxpaying generations to carry the burden of pension provision for more senior ones," he said.

"Reform will be necessary to secure sufficient resources to match our increasing longevity.

“The Government cannot continue to avoid reforming our outdated pension system and it must accept that brave decisions will need to be made to ensure adequate pension provision for future generations,” he added.