Ireland’s Department of Social Protection (DSP) has defended the decision to enrol employees immediately into the upcoming auto-enrolment scheme.

It means that when the scheme launches, all current employees without an occupational pension will be enrolled into the system. Going forward, new members of staff will also be enrolled immediately under the rules. This policy was criticised recently and there has been a call for employers to be given a six-month derogation period to enrol workers.

A DSP spokesperson told European Pensions: “Auto-enrolment has been designed without a waiting period. This is so that participants can begin to enjoy the benefits of the scheme and saving for their retirement as quickly as possible.”

In addition, it added that where a company has an occupational scheme with a set waiting period for staff members before they can be enrolled, then those employees may be auto-enrolled.

“In the event that an occupational pension scheme operates a waiting period it is likely that some workers will be automatically enrolled before the end of the waiting period. If this happens and they subsequently join the occupational scheme they will be exempted from AE,” a DSP spokesperson said.

It is not clear whether the exemption would be immediate or if the staff member would have to wait before leaving the AE scheme, which is set at six months as standard.

However, the DSP has previously mooted the idea of assessing earnings over a three-month period to establish whether someone meets the earnings threshold; this would give employers some time before having to enrol staff.

Commenting, Irish Association of Pension Funds CEO, Jerry Moriarty, said that a lot of schemes are considering removing their waiting periods and that it is more likely to be an issue for sectors with a high turnover of staff – such as retail or hospitality, which are also less likely to have existing schemes.

Furthermore, Irish Life director of corporate partnerships, Shane O’Farrell, has also previously said that trustees will be impacted by auto-enrolment as there could be some changes to scheme rules: “If employers want to enhance their pension arrangements, there might be removal of waiting periods etc, which will come through to the trustees to note and approve.”

There are many creases to be ironed out in the AE system before its launch in 2025. The legislation has now been enacted and Tata Consultancy Services (TCS) has been selected as the preferred bidder to administer the AE system on behalf of the National Automatic Enrolment Retirement Savings Authority (NAERSA), but it is yet to be established.

Still, the DSP is yet to commence the procurement of an investment manager for the scheme. The DSP told European Pensions that is “now focused on working to arrange the implementation plans and timelines of administrative services, including the ICT infrastructure”.

“A phased communications strategy has been developed and the department is continuing to work with agencies already under contract with the department to further develop and finalise the elements of the campaign. Considerable levels of stakeholder engagement have already taken place as part of phase one of the strategy, with significant numbers of employers attending various webinars that the department has presented at,” a DSP spokesperson added.

European Pensions has contacted the DSP for further clarity on the rules, but it has yet to respond.

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