Lawyers at Eversheds Sutherland have highlighted areas of the proposed legislation setting up a new auto-enrolment pensions system that they believe can be improved.

The Automatic Enrolment Retirement Savings System Bill 2024 was being debated in the Dáil this week.

In a note on the firm’s website, the lawyers say that, while the bill is largely in line with previous Government guidance on how the scheme will work, it also contains provisions that they describe as “potentially controversial”.

A new State body, the National Automatic Enrolment (AE) Retirement Savings Authority, will be set up to administer the scheme.

‘Unnecessary complication’

Eversheds Sutherland says that the bill, in effect, disapplies the normal statutory requirement for employee consent where an employer makes a deduction from wages for payment to the AE authority.

The firm adds that this facility is not extended to deductions from wages for payment to other pension schemes.

“This could prevent many employers from auto-enrolling their non-participating staff into their existing pension arrangements and force them to use the Government system in parallel, causing unnecessary complication,” the lawyers state.

‘Lack of clarity’

The bill allows the new authority to determine the minimum standards to apply to qualifying schemes that allow employers to remain outside the AE system.

Eversheds Sutherland warns, however, that this could be seen as giving rise to a potential conflict of interest for the AE authority.

The firm also highlights what it describes as an “unwelcome” lack of clarity on the mechanics of how the AE authority will gather the necessary information to determine eligibility, and on individual employers’ role in relation to this.