Irish Employers Fear UK-style Auto Enrolment
13 September 2012 (PLANSPONSOREurope.com) – Irish employers fear the introduction of auto-enrolment to get Ireland’s first pillar pension spending under control.
This week a report from the International Monetary Fund (IMF) warned the cost of providing state funded pensions needs be brought down.
This has prompted fears businesses could be required to pick up the slack for the state, as is the case in the UK, where all companies will eventually have to provide a workplace pension.
And Fergal O’ Brien, head of economics and taxation at employers group IBEC told PLANSPONSOR Europe the Irish government believes auto-enrolment is “worth exploring” but warned now is not the time to introduce the extra layer of costs to business that auto-enrolment would bring.
“It is something that is going to be discussed, particularly as we come out of the crisis,” he said.
“From our feedback from members we would think it would have a disproportionate effect on smaller companies that currently don’t have occupational schemes and would be a big limiting factor in terms of SME employment."
O’ Brien added the Irish government is also sympathetic to concerns about increasing taxation.
Jerry Moriarty, director of policy, at the Irish Association of Pension Funds (IAPF), also said the Irish government would consider passing part of increasing first pillar costs on to employers.
“If the government decides to increase social insurance contributions, obviously some comes from employees and some from employers so that could have an impact - if the government decides to increase those contributions to cover this liability it is accumulating,” he added.
“You could cut the benefits in some way and that’s something the government have been very loath to do; to cut social welfare pensions. I’m not sure they’ll do that but if they don’t do that you have to look at the contributions side.”