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Pandemic could scupper auto-enrolment scheme

20 May 2020 / regulation Print

Pandemic could scupper auto-enrolment scheme

20% of professionals working in the pension industry believe proposals for an auto-enrolment scheme may not survive the economic fall-out from theCOVID-19 pandemic.

The figure comes from a survey of more than 100 people working in the sector carried out by law firm Mason Hayes & Curran and the Irish Institute of Pensions Management (IIPM).

Guidance

The plan to automatically enrol workers in a pension scheme is due to begin in 2022. As well as the 20% of pension specialists who do not see it happening at all, 66% believe the plan will be delayed by a number of years.

The survey also finds significant concerns about pensions guidance provided by regulatory authorities during the pandemic, with 54% of respondents only partially satisfied by the guidance and 39% not satisfied at all.

Legislation

Stephen Gillick, head of pensions at Mason Hayes & Curran, says the hands of the Pensions Authority are currently tied by legislation, and it must act in compliance with the provisions of the Pensions Act.

“But they have recognised that we are living through extraordinary times, and have stated that they will take the current circumstances into account when assessing compliance with legislative provisions,” he adds.

Contributions

15% of those surveyed say employer pension contributions to their pension scheme have been reduced or suspended since the start of the pandemic, but Mr Gillick says this may reflect the low pensions coverage contribution rates in sectors severely hit by the crisis, especially the hospitality sector.

71% of those surveyed have yet to adjust their pension’s investment strategy since the start of the pandemic.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland