Support growing for auto-enrolment pension schemes

The vast majority of employees in Ireland are in favour of being automatically enrolled in a company pension scheme, according to a new report from State Street Global Advisors (SSGA).

Four-fifths (80 per cent) of survey respondents said they would be happy to be placed straight into a company pension scheme when they start a new job, with only 10 per cent believing it to be a bad idea.

In addition, SSGA’s Retirement Confidence Monitor – which tracks attitudes to savings in defined contribution pension plans in the US, UK and Ireland - found that 60 per cent would back a pensions scheme that automatically increases their contributions on a yearly basis.

At present, employees in Ireland are less confident than those in other nations about the prospect of putting enough funds aside for retirement. Just over a third (39 per cent) feel “on track” to meet their retirement goals.

Indeed, half of all Irish respondents anticipate having to work beyond the current traditional retirement age of 65, with 42 per cent expecting to do so in full-time employment.

Alistair Byrne, senior defined contribution investment strategist, SSGA, said the results demonstrated continued “concern about their state of preparedness”.

“Many people are not saving enough, so the introduction of automatic enrolment and automatic escalation of pension contributions should be considered as ways to help more people prepare for retirement,” added Byrne.

The figures indicate that governments may have been somewhat cautious in their implementation of mandatory pensions coverage, with moves to encourage people through tax incentives and otherwise to save for retirement having little effect; as the number of people holding private pension schemes still hover around the 50 per cent figure.

Date published 26 Sep 2016 | Last updated 26 Sep 2016