BrightPayLast updated: 28 March 2023
Eleanor Vaughey27 March 2023
If you haven’t been living under a rock, you may have heard of the new Automatic Enrolment scheme that’s coming to Ireland next year. Essentially, any of your clients’ employees who meet a certain criteria (check out the criteria employees must meet here) need to be enrolled into a workplace pension scheme.
As a nation, we’re all living longer, healthier lives, but only a third of us are saving towards our retirement. In an aim to bridge the gap, the Irish government are introducing a workplace pensions scheme which will work on an ‘opt-out’ rather than an ‘opt-in’ basis. This way, more people across the country will have a fund available to draw from once they reach retirement age.
Automatic Enrolment is still quite a hazy topic, with a lot of confusion around it. Questions such as, how do employers know which employees are eligible, how much will employers and employees have to contribute, and what if employers already offer their employees a pension scheme? That’s where you’ll come in. Automatic Enrolment will quickly become a hot topic in the coming months, which presents a lucrative opportunity for you to provide expertise and services around the subject to help get clients up to speed and ensure they’re compliant when it comes to their duties.
Employers will need to match their employees’ pension contributions. Contribution rates will start at 1.5% in 2023. This will increase by 1.5% every three years until reaching 6% by 2034. Making these contributions could end up costing your clients quite a bit, and they may need advice from you on where to cut costs to keep profits steady.
Auto Enrolment will also add to your clients’ duties and responsibilities – from managing opt-ins and opt-outs and monitoring employee eligibility, to retaining records and making contributions and deductions. This will also mean extra work for you if you look after their payroll. The introduction of the scheme is a chance to expand your existing service offering. If you go down this path and decide to start charging extra for help with Auto Enrolment, make sure your rates reflect these extra duties. Communicate the new rates with your clients as early as possible, so they’re prepared come 2024. Let them know why your prices are increasing, the importance of staying compliant, and how much it will take off their plate. We also suggest offering some advisory services around the topic to get these conversations moving. Maybe invite them to an Automatic Enrolment workshop, where they can chat with you for an hour about any questions or concerns they may have.
While this is an exciting opportunity to expand your service offering and increase your fees, you’ll need to be strategic about your time management. You don’t want to be glued to your laptop each pay period with all the extra tasks involved. You need innovative software that can help streamline and automate these tasks so you can get more bang for your buck.Here at Bright, we have already implemented Auto Enrolment functionality in the UK version of our payroll software, BrightPay. We don't charge extra for our Auto Enrolment functionality across the pond, and we don't plan on charging extra for it in Ireland either. We’re aware of all the hoops you’ll need to jump through and can help things as straight forward as possible for you from the get-go. To learn more about Automatic Enrolment, including eligibility contribution rates and incentives, download our guide where we delve into the topic more.