Questions: who is this, and it will work?

  • Questions: who is this, and it will work?
    Independent.t. E.
    What is the plan? The government has finally launched the proposals as the new auto-enrolment Pension plan could work.

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What is the plan? The government has finally launched the proposals as the new auto-enrolment Pension plan could work.

It is in the form of what is called ‘project proposal or discussion document intended to generate discussion of the disadvantages and the creation of new and better proposals.

Proposals from the Department to the Minister for social protection Regina Doherty are open to discussion and nothing against the mandatory pension scheme is set in stone.

Automatic enrollment will be phased in until 2022 and is aimed at low-and middle-income who do not have private pensions.

Whom it is directed?

There are about 900,000 people who have no pension works. The new scheme will apply to 410,000 workers. They will remain with the state-funded pension only resign if action is not taken.

Currently, the State pension is about € 12,000 per year, which is one third of the average wage. Most one third of the workforce without supplementary pensions face a troubled time in retirement without additional pension provision is put in place.

How will this work?

Workers in the private sector of more than €20,000 a year will be automatically included in the new scheme, he suggested.

The state will contribute €1 for every €3 introduced in the Pension member. The contributions will be set at 1pc of salary 2022, with employers ordered to match the amount.

The contributions will increase to 6PC one member to 2028.

Employees will not be able to abandon the system, at least nine months after signed.

Employees earning more than €75,000 can contribute to the scheme but the employer does not have to match contributions in excess of this amount. Workers earning less than €20,000 will not be automatically enrolled in the scheme, but will be able to register in the system.

Self-employed will not be automatically subscribed to the scheme, but will have the opportunity to enter.

Employees of the Fund managed by the private pension provider sector, depending on their appetite for risk. If they do not choose a Fund, they will be placed into the Fund default.

Pensions are calculated in accordance with the system will be paid when the State pension of the recipient is payable.

The government assumes that the maximum fee for management and investment will be 0.5 PC a year. This is important. Standard prsas (personal retirement savings account), which was an early attempt to introduce flexible retirement, in the amount of up to 5pcs contributions and 1pc of the market value of the assets of the Pension Fund.

How much will it cost?

We don’t know the answer to this question. In the ‘project proposal considers the creation of a Central authority processing, which will collect contributions from employers and to grant pension to workers who don’t want to choose.

But it’s unclear how much it will cost and why.

Will it work?

He will have, and has worked in countries such as the UK. More than 10 million workers enrolled in the scheme with defined contributions for the last six years, when employers were required to enrol employees in workplace pensions.

The alternative is that the massive burden on the state. The number of people aged over 65 in Ireland is expected in the next two decades will double to more than one million, putting a huge strain on the state Pension Fund, which is paid for by the PIF (social insurance) contributions.

The consultation period will be open until November 4th. Write Your opinions

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