Auto-enrolment will be seen as a tax if employers don’t work on messaging

Companies and the Government need to act now to explain the value of a pension or run the risk of undermining landmark programme, says Aon

Workers are likely to see auto-enrolment as a tax unless employers and the Government move to communicate actively about the positive nature of the scheme, a senior business figure has warned.

The Government is guiding legislation through the Oireachtas to put in place a compulsory workplace pension that will see up to 800,000 private sector workers between the ages of 23 and 60 and earning above €20,000 automatically signed up to a workplace pension scheme. Auto-enrolment is designed to reduce the risk of pension poverty in old age.

The intention is for the plan to go live at the start of next year, although there are growing concerns about whether the Government can meet this latest target in advance of an expected general election.

A study by Aon, a professional services firm specialising in retirement, workplace and risk, has found that just over one in three employers has taken any action to prepare for the impact of auto-enrolment on their business and workforce, with even fewer – just 28 per cent – reviewing existing occupational pension plans to see how they will be affected by the new rules.


“If we as employers and as a Government do not communicate properly, positively, about all of this, it will just be viewed as a tax. as opposed to a positive – this is your own money being put into a pot for you to prepare you for retirement,” said Mairéad O’Mahony, head of human capital at Aon Ireland.

“We should be capable of communicating about this in a positive way so people appreciate it and we have low levels of opt-out. Because if we go at this and we have a ham-fisted communications strategy and we have not positioned it positively and we then end up with levels of opt-out that are way, way higher than we have seen anywhere else, then the whole thing, all the costs, all the heavy lifting, has been for nothing.”

She said she was surprised that the Aon survey showed so few businesses had engaged with the implications of auto-enrolment or considered the options for existing occupational pension schemes.

“I was surprised at that,” she said. “That is the first place we looked at – existing arrangements that you are already putting a huge amount of work and effort into making sure they are fit for purpose. I would have thought that would have been the starting point – thinking about how you bring the additional cohort of employees into that net – so that number surprised me for sure.”

But what about the danger of investing considerable effort only to find out that it fails to materialise before an election?

O’Mahony understands the scepticism on that front and accepts it is a real danger.

“What I would say to an employer is don’t bet on it. Do your work and get ready so that if this is delivered as planned on January 1st, 2025, you can meet it with confidence, you understand the cost, you have communication and you know how your business is going to cope with the change.

Dominic Coyle

Dominic Coyle

Dominic Coyle is Deputy Business Editor of The Irish Times