Will Ireland get auto enrolment right?
By 2021, Ireland looks to roll out a similar auto enrolment model that was launched in the UK in 2012. Up to now, Ireland has encouraged employees to save for their retirement through generous tax incentives. This hasn’t been enough as Irish people are not saving enough for their retirement. Just 40% of private workers are contributing towards a pension scheme for their retirement.
As the aging population grows in Ireland, the viability and affordability of the State pension is seriously in question. The Irish Prime Minister Leo Varadkar has announced his commitment to initiate a workplace pension reform that will commence by 2021. This will involve the introduction of auto enrolment where employees will be enrolled into a qualifying workplace pension scheme by their employers. Employers and employees will be obliged to contribute a percentage of an employee’s salary towards the pension pot.
Plans for auto enrolment are to commence over the next few months. It hasn’t been confirmed whether this is something that will affect all employees or just employees who earn above a certain amount. Auto enrolment will be a viable solution to the current pension problem and hopefully encourage people to be more financially aware of saving for their retirement.
The role of payroll software
As in the UK, the administrative process of auto enrolment will be significantly simplified if processed in payroll software. The UK government has advocated that payroll software that automates the employer auto enrolment duties will make the process easier. Employers that choose to rely on a manual system will find the process time consuming, prone to errors and more complicated compared to using payroll software system.
Your payroll software is already set up and holds up to date information about your employees such as their name, address, earnings and date of birth. This information needs to be accurate and up to date each pay period to ensure you are enrolling the correct people and to ensure the correct contributions are being paid.
Your payroll can also calculate how much the employer and the employee will need to contribute each pay period. This is important as failing to pay the correct amount of contributions will result in non-compliance where the employer will face fines and/or court action.
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Written by Karen Bennett | BrightPay Payroll Software