Financial News

Government proposes savings plan for people without private pension

A plan to enrol all workers without a private pension into a savings scheme for their retirement could be introduced within four years.

Minister for Employment Affairs and Social Protection Regina Doherty said today that most workers are not saving enough for their retirement years.

“Without any action many people will be faced with a serious reduction in their living standards when they retire,” she said.

However, under this proposal a new savings system would be backed by contributions from employers and the State.

All employees without pensions who are aged between 23 and 60 years and earning over €20,000 will see at least 1% of their income automatically set aside in savings.

Employers will match this amount and the State will pay in €1 for every €3 the employee contributes.

The plan would allow employees to opt-out of the scheme if they wanted to, but Ms Doherty said the experience in other countries suggests that workers tend to remain in the automatic enrolment system.

The Government has now launched a consultation process to help find the best way to deliver what the minister described as one of the most fundamental policy reforms in a generation.

Full Story from Mícheál Lehane @ RTE News

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