By Business & Finance 71% of Irish companies who have staff working in UK subsidiaries are unaware of automatic enrolment legislation, requiring employers to register staff for a pension scheme. This is according to new research conducted by business software solutions provider Sage Ireland which also showed that only 53% of companies in Ireland offer any form of pension scheme to staff.
Under UK legislation all employers are legally obliged to automatically enroll employees into a workplace pension. If the employee does not want to participate they must actively opt out. Employers must automatically enroll employees who are:
- Between age 22 and state-age pension
- Earning over £9,440 each year
- Working in the UK
The legislation is aimed at increasing the number of people who make adequate savings for their retirement, and Ireland’s Department of Social Protection is actively considering introducing similar measures in Ireland.
Sage’s research in Ireland shows that even where companies do offer pension schemes, in 52% of cases less than a quarter of staff chose to enroll.
Simon Bell, commercial manager at Sage Ireland said: “Automatic enrolment has been introduced in the UK as a way of trying to address the pensions time bomb that the country faces. This challenge is not unique globally and Ireland faces the same challenge getting people to save for their retirement and the introduction of similar measures is under active consideration.
“For Irish companies who have staff employed in the UK this is more than just something to think about for the future, it is something they must consider now, and from our research many companies are not yet aware of their responsibilities. Of particular concern are companies in the border counties who also have operations in Northern Ireland that are covered by the UK automatic enrolment legislation.”
Each company has a staging date dependent on the number of employees in their business. They will be notified of this staging date by the UK Pensions Regulator.
An OECD review of the Irish pension system published in 2013 recommended auto-enrollment as one of the measures that could help ensure improved retirement provision in Ireland. According to IFG pensions, more than 70% of employees in their 20’s are not taking up the offer of employer contributions to pensions, ultimately indicating that people in Ireland have made no formal provision for their retirement and plan to rely on the state pension.
