Independent Ireland leader and Mizen Head TD Michael Collins has queried government’s auto-enrolment pension scheme, asking if it’s another Universal Social Charge in the making.
Deputy Collins has raised a number of concerns around the scheme, set to launch next September, highlighting the financial burden on both employers and employees, while questioning whether in the long term this scheme is intended to replace the current State pension.
‘This scheme is eerily similar to the Universal Social Charge (USC) fiasco — another compulsory deduction from wages that disproportionately impacts workers and small businesses,’ he said.
‘Employers and employees are forced to contribute 3% of gross wages, while the government contributes a mere 0.5%. Is this the beginning of the end for the State pension?’
He asked why the government is demanding more from workers and businesses than it is willing to contribute itself.
‘Employees will have no choice but to contribute unless they actively opt out after six months – only to be auto-enrolled again every two years. Employers who fail to comply face fines and prosecution, adding another layer of risk and red tape for businesses,’ he said.
He added that there was no clear opt-out path for employees beyond short windows, trapping workers in contributions they may not be able to afford.
‘Employers must track contributions, manage opt-outs, and handle automatic re-enrolments, significantly increasing payroll complexity and compliance costs,’ said the deputy.
The Government must immediately guarantee that auto-enrolment is a top-up or a long-term replacement for the current State pension system, he said.
‘If we do not get a cast iron guarantee that this will not replace the State pension, workers will be expected to fund their retirement almost entirely on their own while still paying high taxes,’ he claimed.
‘The government must provide clarity immediately.’
