- Additional contribution costs and the impact on existing pension scheme contributions top two auto-enrolment concerns
- More than a third (35 per cent) of firms yet to take any action in preparing for the new system ahead of introduction in January
- 64 per cent of companies believe the new system of auto-enrolment will help reduce the gender pension gapt
DUBLIN, May 28 - Aon plc (NYSE: AON), a leading global professional services firm, today published a new
report that provides insights into the attitudes and actions regarding the introduction of a new pension auto-
enrolment system among HR, finance and business leaders in Ireland.
Aon’s pension auto-enrolment report surveyed 151 businesses across Ireland between February and March
2024. Auto-enrolment is a new retirement savings system for employees that will be introduced in January
2025 to automatically sign-up 800,000 private sector workers, who currently do not have a pension, into a
scheme.
Results reveal that 67% of businesses in Ireland have concerns about the introduction of the new system of
pension auto-enrolment. The principal concerns of firms relate to the increased costs of additional contributions
(28 per cent) and impacts on existing contributions (28 per cent). 38 per cent of business leaders state that
their organisation has not received sufficient clarity about the design and details of the scheme in advance of
launch
More than 4 in 10 businesses (42 per cent) plan to adjust future employee compensation levels to manage the
increased costs created by the system. 30 per cent of surveyed firms plan to transfer costs directly to the
consumer, rising to 40 per cent among mid-sized businesses, while 28 per cent of organisations plan to reduce
other business costs to absorb the impact of the scheme.
Preparing for change
Findings from the report show high levels of awareness (74 per cent) of the planned introduction of auto-
enrolment. Awareness of the scheme was highest among enterprises with more than 250 employees at 78
percent, while mid-sized businesses had the lowest level of awareness of the scheme at 64 per cent.
Despite high levels of awareness, more than a third (35 per cent) of firms have yet to take any action in
preparing for auto-enrolment. Only 28 per cent of businesses have reviewed existing occupational pension
plans to see how they will be affected by the system. 16 per cent of firms have yet to develop a strategic
roadmap for the system ahead of the approaching deadline for introduction on January 1st 2025
Commenting on the results of the survey, Mairead O’Mahony, Head of Human Capital at Aon Ireland said:
“The introduction of pension auto-enrolment is a landmark moment in pension reform that will have far-reaching
implications for every worker and employer across the country. With the system set to be introduced in January
of next year, close to 800,000 employees will be brought firmly into the pensions safety net.
“It’s clear from the findings of Aon’s Pension Auto-Enrolment report that many businesses are concerned about
the cost and complexity of the new system. As we move from design to implementation, it is important that we
provide businesses with the necessary supports to navigate the significant change ahead and minimise the
impact of the compliance burden and increased costs on businesses.
Our research reveals that most business leaders believe the system will help to create a fairer and more
equitable pensions landscape in Ireland. However, the proposed system is not perfect, and additional
measures should now be considered to further address the gender pensions gap.
“We hope that the findings from our research can support business leaders to make better informed decisions
as they prepare for the introduction of pension auto-enrolment. At Aon Ireland, our team of pensions experts
stand ready to support businesses to navigate the significant change ahead and harness the opportunity to
create a fairer, more equitable and resilient pensions system into the future.”
Ambitious timeline
With significant changes required by businesses to prepare for the landmark reform ahead of the scheduled
January 2025 deadline, many companies remain uncertain as to whether it will be feasible to implement the
system in time.
52 per cent of surveyed companies believe the planned introduction date can be achieved, rising to 57 per cent
of firms with more than 250 employees. 60 per cent of mid-sized companies do not believe the proposed
introduction date is feasible.
Impact of reform
The report highlights the importance of the scheme in reforming Ireland’s pensions landscape and creating a
fairer and more equitable system fit for the future.
Results reveal that 64% of businesses believe the new legislation can support reducing the gender pension
gap. Ireland’s gender pension gap currently stands at 35% according to the Economic and Social Research
Institute (ESRI) and has emerged over time due to differences in income from private and occupational
pensions.
There are signs that the planned system can help to support businesses meet their talent needs – a key
challenge facing many businesses in the context of a tight labour market. Nearly 2 in 3 (64 per cent) business
leaders state that the scheme provides an opportunity to review and enhance their organisation’s employee
value proposition which can in turn help to attract and retain top talent.
The full findings from the Aon pension auto-enrolment report are available here.
About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business.
Aon Solutions Ireland Limited trading as Aon, is the founder of the AON Ireland MasterTrust and is a private company limited by shares and regulated by the Central Bank of Ireland. Registered in Ireland No. 356441. Registered office: 5th Floor, Block D, Iveagh Court, Harcourt Road, Dublin 2, D02 VH94, Ireland.
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Media Contacts
Conor Shearman
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Email: [email protected]