The government has also announced a new “total contributions approach” to pensions from 2020.

ON A VERY snowy day for many parts of the country, the government has announced major changes to the pensions system in Ireland, with an automatic enrollment system one of its key features.

From 2020, a new State pension system will come into place based on a “total contributions approach” where a person’s lifetime contribution will more closely match the benefit they receive.

In the future, the government will aim to keep the state pension at a level of 34% of average earnings, and said it will increase the pension in line with changes to average wages and/or the consumer price index.

While the State pension age is set to increase to 67 in 2027 and 68 in 2028, but there will be no further increase before 2035.

From 2022, all workers will be automatically enrolled onto an automatic enrolment retirement savings system.


The Department of Social Protection explained: “It is intended that employee savings in this scheme will be supported by employer and State contributions.

Under the system, workers will have the freedom to opt-out should they so choose, however experience in other countries indicates that once automatically enrolled workers tend to remain in the system.

The department added that this will address “Ireland’s significant retirement savings gap”.

The government has been criticised in the past for some pensioners being left penalised for missing contributions in their youth, to raise a family for example.

The department said that the pensions model from 2020 will prioritise those people “impacted upon by anomalies” in the yearly average system in place since 1961, and whose home-caring prior to 1994 has not been recognised until now.

Minister Regina Doherty said: “It is increasingly evident that most Irish workers are not saving enough, or indeed at all, for their retirement years. Many people will be faced with a serious reduction in their living standards when they retire – a fall in income they clearly do not want.

When introducing this (auto enrolment) system, we will ensure that those on low to middle incomes receive financial support from both the Government and their employer.

The government’s “A Roadmap for Pensions Reform 2018-2023″ can be viewed here.