Auto enrolment could prove very valuable to generations of workers currently not signed up to a private pension. That’s the finding of EY tax partner Michael Rooney, who crunched numbers this week to show that a young worker drafted compulsorily into the scheme at the age of 23 when he is earning €30,000 could expect to have a pension pot of €590,000.
Even someone well into their career – at 38 and on the average industrial wage – could reasonably expect to accrue a pension pot of over €344,000 by the time they retire, his figures show.
Rooney is the first to put some concrete numbers on what the move to compulsory workplace pensions might actually mean for workers at the sharp end. It’s a useful addition to the information available even if his projections are necessarily subject to the vagaries of investment performance and wage rises.
Some similar practical engagement on the political side would be welcome. Workers and their bosses – on whom the burden, financial and otherwise, of making auto-enrolment a reality – are still being assured by Government that everything will be up and running early next year.
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This is, of course, just the latest in a series of unrealistic deadlines set by the Minister for Social Protection and now Fine Gael deputy leader, Heather Humphreys.
Her new boss, Simon Harris, has already made it clear he wants the Government to run full term. That means an election in the first quarter of next year – before March 22nd. The notion that Coalition parties are going to start taking money from workers’ pay packets weeks before they go to the polls is fanciful. Not least as their efforts to sell the idea so far have been somewhat ham-fisted.
If ministers really do want to sell the notion of auto-enrolment to workers and their employers in a way that secures buy-in, it is well past time for some straight talking. First up, there is little point dragging everyone too far down the road when it now seems inevitable that the entire project will be subject to some element of review from an incoming Government next year ... and further delay.
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