Financial advisers believe the Government will fail to meet its latest deadline to introduce an auto-enrolment pensions scheme for workers who do not have any private retirement income cover.
Less than two months after Minister for Social Protection Heather Humphreys announced that up to 750,000 people would be automatically signed up from January 2024 for a scheme that would see them contribute to a private pension, more than three-quarters of advisers in the industry have indicated the Government will not have enough time over the next 18 months to go live with the new regime.
And a quarter of them say the radical reform of Government pensions policy, designed to ensure every worker has reasonable financial resources in retirement might never happen at all.
"Despite the fact that last month the final design principles for the automatic enrolment retirement savings system for Ireland were announced, much of the industry appears unconvinced that auto-enrolment will be operational any time soon," said Glenn Gaughran, head of business development at Independent Trustee Company (ITC), which conducted the survey.
“In fact, almost one in every four financial advisers we asked said that it would be 2026 before it was available to workers – or perhaps never at all.
ITC interviewed 100 financial advisers for its survey.
Mr Gaughran said that much work was still needed in terms of tweaking the design of the system, with the Government needing to secure at least four fund management companies to operate the system.
“Based on our assessment the first few years are likely be loss-making for the participating providers, so they are likely to look for a long-term commitment from the Government for the provision of these services,” he said.
The industry is also divided on the likely impact of auto-enrolment on the wider pensions market.
The largest group doubts there will be any knock-on effect. Around one in four anticipate that a Government information campaign to support auto-enrolment could boost awareness and even increase voluntary pension saving. However, others worry people currently saving more into occupational pension schemes might just rely on auto-enrolment which will see a maximum of 14 per cent of gross salary invested.
