Brokers Ireland, which represents almost 1,250 broker firms, has welcomed the Government’s auto enrolment announcement, noting that the improvement and extension of pension coverage is critically important for consumers.
The organisation said the design features of the scheme will ultimately dictate the value of return to consumers over the longer term.
Diarmuid Kelly Chief Executive of Brokers Ireland said his organisation would be formally responding following detailed consideration.
“However, in relation to the initial proposal, while the total contribution between employee/employer and the State in the auto enrolment system of an eventual 14 percent is probably about right, we would have a concern around the lead in time from 2022.
“Effectively, we are talking about ten years from now before auto enrolment would be fully in place.
“We would encourage the Government, given that it has taken so long to get to this stage, to try and reduce that timescale. A decade is a long time in anyone’s life and such a gap in terms of proper pension planning and investment can have a very serious impact on income in retirement,” Mr. Kelly commented.
He said his organisation would recommend that anyone who doesn’t currently have a pension in place should seek advice from their local impartial financial broker noting that a critical element for consumers will be how people’s auto enrolment savings will be invested.
“To this end we welcome the proposal for a private sector competitive solution. This will generate best value for consumers over the long term,” Mr. Kelly concluded.