Well, they might not have a choice depending on how things turn out in the legislation?
It'd be extraordinary if you ended up in a situation where the basic auto-enrolment package is better than the Single Scheme. This would be more likely to be the case at lower salary levels.
For example, the following tables sets out total contributions / total benefits on retirement for members of the Single Scheme at lower salary levels (Inflation-Neutral):
Salary | Annual Contribution
(Gross) | Annual Contribution (Net) | Pension on Retirement after 40 Years | Lump Sum on Retirement After 40 Years | Pension Benefits Capital Value (Male, Married, NRA 66) (40 Years) | Total Contributions (Net) (40 Years) | Capital Value Efficiency Of Contribution
(i.e. Total Capital Value of Benefits / Net Contributions over 40 Years) | Total Gross Contributions
After 40 Years |
€30,000 | €1040 | €832 | €2,000 | €45,000 | €91,800 | €33,280 | 2.8x | €36,000 |
€35,000 | €1,382 | €1,105 | €4,500 | €52,500 | €157,800 | €44,200 | 3.6x | €55,240 |
€40,000 | €1,873 | €1,124 | €7,000 | €60,000 | €223,800 | €44,960 | 5.0x | €74,920 |
€50,000 | €2,587 | €1,714 | €12,000 | €75,000 | €355,800 | €68,560 | 5.2x | €114,280 |
At €30,000 salary, a gross contribution of €1040 to the Single Scheme over 40 years would get you €2,000 pension and a lump sum €45,000 lump sum on retirement. Accounting for rises in inflation at 2% PA this would be the equivalent of €4415 gross pension and €99400 lump sum
The same contribution to auto enrolment would be €832 (employer) + €832 (employee) + €277 (State) = €1941 contribution PA. Assume a 6.5% annual return and you're looking at a pot of circa €400,000k after 40 years. A very optimistic 8% would get you circa. €600,000k. Assuming the same lump sum was taken, on the 6.5% scenario you'd be able to fund for a pension of €4415 for 68 years! (
edit: I didn't math good)
This is all back of the envelope math but I think the point is illustrated fairly well.