A leading pensions expert is warning that the Government’s auto-enrolment campaign for pensions – due to begin on January 1st – does not equip businesses with the practical information employers need to choose between auto-enrolment and existing pension options available.
Feargal McKenna, co-founder of Pensions Awareness Week, which takes place from September 29th to October 3rd, and Head of Corporate at Moneycube.ie, was speaking to over 100 businesses at a Breakfast Briefing for Wicklow’s business community this morning, which was also addressed by Tánaiste Simon Harris.
The free event, at The GRID in Greystones, was organised by Wicklow’s business networking group, East Wicklow Business Network (WicklowBusiness.ie) and the Local Enterprise Office Wicklow.
Feargal McKenna unveiled a new Auto-Enrolment Calculator developed by Moneycube.ie specifically for employers and hosted on the Pensions Awareness Week website – www.pensionsawarenessweek.ie.
The calculator – which is free to use – is designed to give Irish employers instant clarity about the true cost of auto-enrolment on their payroll and the impact on employees’ take-home pay.
It also allows employers to compare these costs with alternative pension arrangements, so they can make informed decisions before the scheme begins.
Unlike most existing auto-enrolment calculators, which focus only on employees, Moneycube.ie’s tool is built for employers, who ultimately decide whether to default into auto-enrolment or take action to establish an alternative scheme.
The calculator is easy to use, with just six steps providing business owners, HR managers or finance teams with the information they need to decide whether to prepare their organisations for auto-enrolment or explore alternative options.
Employers enter a few simple details about their workforce — such as employee numbers, salary levels, and contribution rates. The calculator instantly shows the total payroll cost under auto-enrolment, how much employees’ net pay will fall, and the potential advantages of alternative options.
Feargal McKenna, Head of Corporate at Moneycube.ie, says:
“If auto-enrolment starts on January 1st, about 800,000 employees will see a reduction in net take-home pay, but employers still have time to choose a structure that can avoid that and possibly deliver better outcomes.
“Our employers’ calculator gives business owners, HR and finance teams instant, side-by-side numbers: the payroll cost under auto-enrolment over a 10-year period and how that compares with a well-designed occupational pension.
Defaulting into auto-enrolment can disadvantage higher-rate taxpayers and limit retirement choices. The Government has released information about their Auto-Enrolment scheme, but it has fallen short in providing a straightforward tool to help people understand the options. Moneycube.ie’s calculator fills that gap while supporting the goal of getting Ireland saving for retirement – something that is core to the reason we set up Pensions Awareness Week.
“We built this calculator because employers need an instant picture from two, often opposing, perspectives: the finance team, focused on controlling costs, and HR, focused on benefits, recruitment and retention. Government may have cried wolf in the past, but businesses no longer have the luxury of waiting. If pension contributions aren’t flowing through payroll by December, the gift under the tree this year — whether you asked for it or not — will be auto-enrolment… and it doesn’t come with batteries.”