Launch of the Final Design Principles of an Automatic Enrolment (AE) Retirement Savings System for Ireland
- Published on: 29 March 2022
- Last updated on: 5 March 2025
AE is a system where employees who do not have an occupational pension are automatically enrolled into a retirement savings scheme. They can leave the scheme or ‘opt out’ under certain conditions if they wish to do so.
The aim of this system is to increase the number of employees in Ireland with access to pension cover.
CSO figures show that 56% of employees have active pension cover (Pension Coverage Survey 2021). When the private sector is considered on its own, this figure drops to less than 35%.
Due to this low rate of pension cover, many people may see a drop in their living standards when they retire.
The State Pension provides a basic level of income and protection against pensioner poverty. However, it is not meant to guarantee all retirees a fully adequate retirement income in terms of replacing their employment income.
To achieve pension adequacy the State Pension should, in most cases, be combined with personal retirement savings. This can be in the form of occupational pensions and/or personal pensions.
The design of Ireland's AE system is research-based and takes into account international cases and best practice.
In 2018 the Department of Social Protection carried out a consultation process. You can access related material online.
The department has since worked with many experts, at home and abroad. The department is also being aided by the European Commission's DG Reform Technical Support Programme which helps EU member states to design and enact reforms. As Ireland is a late adopter of AE, the design incorporates best practices and flexibilities based on learnings from other countries.
