What is a typical employer's contribution to a pension scheme at present?

[Brendan Burgess]

Under the new scheme it will be 6% up to a limit of €80,000.

If I am in a scheme at present where the employer is paying less than 6% , I would want to move to the new scheme. Especially if I am a 20% tax payer.

Is this allowed?

Or will all employers be required to contribute 6% to a pension scheme, private or auto-enrolment?

Brendan

 

[Paul M.]

If I am in a scheme at present where the employer is paying less than 6% , I would want to move to the new scheme. Especially if I am a 20% tax payer.

That'd make sense alright. I would assume that employers will either match the 6% or wind down their existing scheme. Considering the increasing regulatory compliance costs and the economies of scale, it might well make sense for many smaller employers to wind down their schemes tbh. We are an outlier in Europe for the number of small pension schemes we have.

Or will all employers be required to contribute 6% to a pension scheme, private or auto-enrolment?

It's a bit unclear from the guidelines but I suspect it'll only be in the auto-enrolment scheme that it'll be required. It will naturally set a new norm though so I'd expect it'll quickly become common practice at that point in the private schemes too.

 

[Paul M.]

To your original question of how much does the typical employer contribute to a pension scheme, I found a 2015 survey done by the IAPF which found the average to be 5.7%:- https://www.iapf.ie/News/PressReleases/default.aspx?id=6

The Irish Times reported that the IAPF 2018 survey found 86% percent were paying more than 5% but only 8% were contributing more than 15%. https://www.irishtimes.com/business...s-with-pension-schemes-survey-finds-1.3743127

Unfortunately access to the IAPF survey reports on their website is for member's only.

 

[Dave Vanian]

Under the new scheme it will be 6% up to a limit of €80,000.

If I am in a scheme at present where the employer is paying less than 6% , I would want to move to the new scheme. Especially if I am a 20% tax payer.

Is this allowed?

Or will all employers be required to contribute 6% to a pension scheme, private or auto-enrolment?

Brendan

Don't forget that the 6% rate won't apply until Year 10 of the Auto Enrolment scheme, which will be 2034 if they meet their target to get it up and running by 2024.