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Pension Auto Enrolment

The Governments Auto Enrolment (AE) pension scheme has moved from blueprint to construction, is your business ready?

We are working with employers to ensure they are taking the necessary steps to get AE ready, talk to us today!

Here in the table, we have analysed some of the main points of the CWPS scheme versus the Government's Auto-enrolment scheme for your information.

 CWPSAEAdditional Comments
Who is eligible to join? Anyone employed by you All workers over age 23 earning more than €20,000 not already in a scheme will be included automatically from 1 January 2025 Employers may have staff under age 23. Employers will also have obligations under SEO for specified workers.
Additional Benefits Lump Sum Death Benefits and Sick Pay under scheme. Pension Fund payable in addition. The value of the fund will be payable on death. The National Automatic Enrolment Retirement Savings Authority yet to confirm how. Unlikely that additional death benefits will be available. Death Benefits and Sick Pay are vital benefits for both employer and employee. Benefits set out under SEO for specified workers.
Charges Charges depend on age based fund - between 0.83% - 0.51% The National Automatic Enrolment Retirement Savings Authority will clarify the maximum investment and administration charges that will apply closer to 1 January 2025. The value of charges will be compared to services provided and returns achieved to enable clarity of comparison.
Additional Voluntary Contributions (AVCs) Allowed - via payroll deduction or from personal Direct Debit. Regular AVCs and Once offs allowed. Not allowed under AE. AVCs are a crucial part of the retirement savings plan for many members who wish to provide for meaningful income in retirement. AVCs may have to be made to PRSA's - which can be costly. Will Employers still have to provide access to a PRSA provider and Direct Debit for members? This is unclear, but likely.
Once off contributions Allowed for Employers and/or Employees Not allowed under AE. Flexibility to make once off contributions can be an important HR benefit for employers in attracting and retaining key staff.
Effect on take home pay Cost of employee contribution is reduced by tax relief at marginal rate (20% or 40%) No tax relief. Full value of contributions deducted from pay. The same contribution under CWPS will cost employee more under AE. Instead of tax relief, the Government will make a contribution (see rates below)
Retirement Age CWPS Normal retirement age is 65. Members can retire from 60 or from 50 if they are no longer working in construction.  In line with State Pension Age - currently 66. No option to retire early. State pension age is likely to increase to 68. Impact here for employers and members if no early retirement available.
Retirement Options 25% or up to 1.5X salary can be paid as a lump sum. Balance to Pension. AVCs to Pension or Approved Retirement Fund (ARF). CWPS provides enhanced annuity rates. No clear view on how this looks yet. Guidance at retirement provided by CWPS to members.
Support The CWPS team have an employer services and a benefits department to ensure employers and members have access to all of the necessary information and to assist them where required. CWPS offer toolbox talks on site to members so that staff understand that value of pension contributions, AVCs, death benefits etc. Employers are likely to be required to ensure that employees understand the AE scheme and what to do. We consider the ongoing support to employers and in particular members, when it comes retirement planning an important part of the scheme. This service is not currently addressed in the plan for AE.
Investment and Fund choice CWPS has a single investment strategy, which phases members’ Pension Accounts across a range of age-related investment funds. CWPS offers 2 additional funds for AVCs. 4 Funds available selected by The National Automatic Enrolment Retirement Savings Authority. Fund details not yet available for comment or comparison.
Contributions Current CWPS rates apply. Employers will be able to opt for rates similar to AE in due course. See rates below. First band of contribution under AE is lower than contribution rates under SEO.

Contributions to Auto Enrolment

The rates are as follows:

1 - 3 1.5% 1.5% 0.5% 3.5%
4 - 6 3% 3% 1% 7%
7 - 9 4.5% 4.5% 1.5% 10.5%
10+ 6% 6% 2.0% 14%

*Employer contributions and the state top-up will be capped at a maximum of €80,000 of an employee’s gross salary.

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