As Ireland prepares to introduce its first ever pension auto-enrolment scheme, there is still significant groundwork to be done.
Colleague awareness and understanding is still too low
"How well do you understand the timeline and steps planned for the rollout of pension auto-enrolment this year?"
This is a cause for concern, given the key role of these professions in the implementation of the new scheme.
Certainly, it appears not enough has been done to explain the impending changes. Only one in four reported any kind of awareness or preparedness campaign for payroll and HR staff, leaving the other 75% without one.
of payroll and HR professionals reported having ‘no’ to ‘very little understanding’ of the imminent pension auto-enrolment rollout.
Organisations are largely unprepared
"How prepared would you say your company is for the introduction of pension auto-enrolment?"
A similar proportion (73%) were not aware of any communication plan to inform employees about the scheme, fund options, or tax implications.
This knowledge gap may reflect under-communication or lack of clarity from external bodies handling the change on a national level.
It may also be down to the perceived distance of the scheme’s introduction, plus a history of postponements and delays, creating confusion and a low sense of urgency within organisations.
However, the introduction date looks unlikely to move significantly further back (at time of writing). While the pandemic introduced a large amount of disruption and delay, the government’s long-term ambition now looks set to be realised. This will bring Ireland in line with other comparable economies that have already established auto-enrolment schemes, including Italy (2007), New Zealand (2007), and the United Kingdom (2012).
Just over a third (37%) report being ‘somewhat prepared’. This leaves a concerningly large 43% either ‘somewhat’ or ‘completely unprepared’.
Has your organisation calculated the cost of auto-enrolment, including contributions and administration of the scheme?
One key element of preparation for the scheme is understanding the cost implications and making the necessary arrangements to handle them.
But when asked specifically about this, respondents once again reported a mixed picture.
Most organisations have done some level of calculation, with 44% partial and 28% complete.
Another 28%, however, have not forecast these costs, which in most cases will not be insignificant.
They will include the employer contributions to match what each employee pays in, as well as the administrative and labour costs of implementing the scheme.
These may well be higher for organisations with larger workforces.
31% Ensured payroll solution can make the necessary calculations, deductions, and contributions to the CPA
27% Updated employment contracts
27% Communication plan to inform employees of the scheme, fund options, and tax implications
25% Awareness/preparedness campaign for payroll and HR staff
Only 1 in 5 payroll and HR professionals judge their organisation to be fully prepared for pension auto-enrolment.
Which of the following steps has your company taken to prepare for auto-enrolment?
of respondents said their organisation has considered outsourcing payroll services
(63% of people with low levels of confidence in their numeracy skills do not always check their payslips.)
Next, the survey investigated other types of preparations organisations may have undertaken.
It appears that the most common form of preparation has been to check that the payroll solution is capable of performing the functions required. Even this, however, is low – only evidenced among a third of respondents.
Sticking with payroll preparation, one in five have considered turning to outsourced payroll services, for help navigating the new auto-enrolment system.
Around a quarter of those surveyed reported steps taken on the HR side, namely, updating employment contracts and communication plans to keep employees informed.
And 23% have gone so far as to redesign their rewards strategy or platform to reflect the impending shift.
Amid the picture of patchy preparations, over a fifth (22%) of respondents said their company had taken none of the actions listed. (The option to choose ‘other’ was available but no respondents selected this.)
We will explore in more detail the key steps that HR, payroll, and finance should be taking to prepare for the launch of auto-enrolment in Ireland, later in this report.
