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Affordability is key issue for pension system study

Employment minister Regina Doherty has commissioned a key study into the affordability of a new auto enrolment system for pensions that she has insisted is on course to launch in 2022.

The new system is aimed at trying to ensure that young workers will have adequate savings by the time they retire. But there is concern this could cause financial difficulties for low-paid workers.

A consultation last year indicated those earning below €20,000 per annum would not be automatically enrolled.

Ms Doherty said her department had commissioned the ESRI to examine the potential “macro and micro-economic impacts” of the new system.

The ESRI is to examine the impact of reducing the earnings threshold and would also examine the gender impact.

“Any decision on the earnings threshold for automatic enrolment will need to balance the benefits of enrolment with concerns regarding affordability,” Ms Doherty said.

She said feedback from last year’s process had been largely “positive and constructive” but generated “diverging and conflicting views from stakeholders on some of the specific aspects”.

“My department is continuing its research and consultation with experts from around the world,” she said.

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