IAPF Spring 2018 Irish Pensions Magazine
IRISH PENSIONS MAGAZINE | SPRING 2018 | 19 FEATURE pension (Contributory). This will replace the current averaging system and remove anomalies in that system. The TCA will be a more logical and transparent system. Under TCA, a person’s contributory pension will be directly proportional to the lifetime contributions they make, with fair regard for periods of child rearing, full time caring, and periods in receipt of social protection payments. Automatic Enrolment (AE) Ireland is one of only two OECD countries without a mandatory, earnings related, component to retirement saving. At approximately 35% of the private sector employed population, the current supplementary pension coverage rate is not satisfactory. Most Irish workers are not saving enough, or indeed at all, for their retirement years. Many people will be faced with a significant reduction in their living standards when they retire – a fall in income they clearly do not want. Having examined the options and looked at international experience, the Government has decided that a new AE retirement savings system, where the individual retains the freedom to opt-out, is the most suitable approach to deliver on the policy objective of increasing coverage. The Government has confirmed that, when introducing this system, those enrolled will receive financial support from both the State and their employer. It is intended to begin enrolling employees from 2022. This project timeframe reflects the scale of such a project and its importance as being the most fundamental reform of the Irish supplementary pension system in generations. A full time AE Programme Management Office has been established within the Department to manage the overall project to develop the system. This office will be responsible for the process of consultation and engagement that will underpin AE. It will establish the evidence base required to underpin future Government decisions regarding the specific operational framework and design parameters of the system. Improving Governance and Regulation Reforms in this area largely entail
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