Employees will have 4 euro paid into their pension for every three euro they contribute under the auto-enrolment scheme going to Cabinet this morning.
The move from Minister Heather Humphreys will mean 750-thousand people without any pension will be automatically signed up for one in 2024.
Auto-enrollment will see all workers earning over 20,000 euro a year automatically signed up for a pension.
The worker will have to pay in, with contributions matched by their employer, and a contribution from the State.
The scheme will be rolled out from early 2024 and phased in over ten years at a cost of 2.8 billion euro to the State out to 2034.
It’s being phased to allow businesses time to prepare for the extra cost.
In years 1 to 3 employees will have to put in a minimum of 1.5 per cent of their salary, the employer will match that, and the State will contribute 0.5 per cent of the salary.
This will rise in increments every three years until by year 10 it’s 6 per cent from both employee and employer, and 2 per cent from the Government.
In other words by then, for every 3 euro the worker puts in 4 additional euro will be added.
This will be capped to the first 80,000 euro of someone’s salary, with the State not matching anything above that.
Employees will be able to opt out from the scheme, but employers can’t.
Social Protection Minister Heather Humphreys will bring details of a new agency (the Central Processing Authority), which will be set up to manage the pension investments, to Cabinet this morning.
