Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697804160765.pdf (Ireland)
Denis Naughten TD, Cathaoirleach Committee on Social Protection, Community and Rural Development and the Islands 21st March 2023 Re: Draft Heads and General Scheme of the Automatic Enrolment Retirement Savings System Bill 2022 By email Dear Cathaoirleach, The Small Firms Association proudly represents a diverse membership of businesses with less than 50 employees: homegrown and spanning every sector of our economy.

Our members are found in every town and every city in Ireland.
In 2018, the SFA made a submission to the Consultation process for an Auto Enrollment Retirement Saving System for Ireland, as we recognise the Government’s ambition to build a sustainable pensions system for the future.

The SFA and its members welcomed the publication of the Draft Heads and General Scheme of the Automatic Enrolment Retirement Savings System Bill 2022 and have followed the pre- legislative scrutiny by the Committee on Social Protection, Community and Rural Development and the Islands.
I am writing now regarding the Draft Heads and General Scheme of the Automatic Enrolment Retirement Savings System Bill 2022, as we believe that there should be several changes made to the Bill and aske the Committee to consider these changes.
These are: • In relation to the scope of participants, we believe that the upper salary threshold of €80,000 is too high and that the scheme should be more focused on building contributions for entry-level low-cost savings; we also believe that self-employed who make up approximately 16% of the working population of which only approximately 30% have supplementary pension cover, should be included within the scope of eligible participants.
• We are concerned about the scale of contributions required for both employees and employers and request that competitiveness and affordability reviews are completed before contribution increases are progressed.
Contribution costs will present a significant affordability challenge for many workers, particularly as they continue to struggle with cost-of-living challenges while employers have faced a raft of State and market related labour cost increases in recent years, and this will add further to competitiveness risks facing Irish business.

• We are particularly concerned at the decision to reduce the three-year automatic re-enrolment gap originally proposed to two years.
We believe that this imposes an excessive administrative burden on employers.

• Many occupational pension schemes include waiting times, which are aligned with probationary clauses in employment contracts.

The proposal within the Bill that the automatic enrolment system will have no waiting period will be at odds with the majority of waiting periods within existing occupational pension schemes.
SFA would be concerned that this could create anomalies and confusion and has the potential to undermine existing occupational pension schemes.

• We are also concerned about the inability to facilitate Additional Voluntary Contributions.

This inflexibility means the scheme will stop employees who might want to increase their savings, like an entrepreneur who has returned to employment after an unsuccessful business venture.
Despite the SFA best efforts in communicating to members about the introduction of an Automatic Enrolment Retirement Savings System in 2024, small business owners are not budgeting for this, due to the uncertainty around its introduction.
At present small business owners are facing, multiple challenges within the business environment be it: increasing cost of doing business, labour shortages, the commencement of statutory sick leave, regulations around transparent predictable working conditions and a whole range of factors that are layering costs on employers, but they are not coming about in a coordinated way.
To see a successful introduction of auto-enrollment, we must give certainty to business owners about introduction dates and administration, by doing this you allow our smallest employers to understand the impact of this change on labour costs and plan for it.
Therefore, we are asking this committee to support Ireland’s small business community and push the implementation to 2025 at the earliest and possibly 2026 so that business owners can have enough lead-in time to implement this change alongside other employment legislative changes.

On behalf of Ireland’s small business owners, we ask the Committee to carefully consider these changes, as it develops its pre-legislative report.
SFA remains supportive of the Bill and is available to discuss these concerns in more detail.

Yours sincerely, Elizabeth Bowen SFA Public Affairs Lead E: elizabeth.bowen@sfa.ie Cc: Clerk of the Committee, Paul Kelly - spcri@oireachtas.ie Cc: Minister for Social Protection, Community and Rural Development, Heather Humphreys TD - minister@welfare.ie