{"id":211345,"date":"2026-01-01T09:13:07","date_gmt":"2026-01-01T09:13:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/211345\/"},"modified":"2026-01-01T09:13:07","modified_gmt":"2026-01-01T09:13:07","slug":"average-worker-faces-e30000-drop-in-income-if-relying-on-state-pension-alone-minister-warns-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/211345\/","title":{"rendered":"Average worker faces \u20ac30,000 drop in income if relying on State pension alone, Minister warns \u2013 The Irish Times"},"content":{"rendered":"

Workers who participate in pensions<\/a> auto-enrolment<\/a> can avoid a \u201cmassive drop\u201d in income when they retire, Minister for Social Protection<\/a> Dara Calleary<\/a> has said as he urged both employees and employers to get behind the new scheme.<\/p>\n

From today, workers, employers and the State will pay into the My Future Fund<\/a> scheme, which has prompted concern among some employers over costs. <\/p>\n

Before the establishment of the fund, between 750,000 and 800,000 people had no pension coverage except for the State contributory pension, which in 2026 stands at \u201cthe guts of \u20ac16,000 a year\u201d, Mr Calleary said.<\/p>\n

The average industrial wage is \u20ac46,000 to \u20ac47,000, he added. \u201cIf you\u2019re going to get to the age of 66 with nothing else in place but the State contributory pension you\u2019re going to take a drop of \u20ac30,000. So that\u2019s why My Future Fund is important.\u201d<\/p>\n

Participation in the new My Future Fund scheme could see a 25-year-old earning \u20ac25,000 end up with a pension of almost \u20ac200,000 while a 50-year-old on \u20ac50,000 could see an occupational pension of \u20ac125,000 to bolster what they get under the existing State pension regime.<\/p>\n

The roll-out of the new scheme is a huge undertaking and the Minister is hopeful it will go smoothly. <\/p>\n

\u201cI don\u2019t want to hex myself by telling you, \u2018Oh it\u2019ll be grand\u2019,\u201d but an \u201cextraordinary amount of work has gone into planning this\u201d, the Minister said in an interview with The Irish Times.<\/p>\n

Under My Future Fund, all employees not already in an occupational pension scheme, aged 23-60 and earning more than \u20ac20,000 a year, will be automatically enrolled.<\/p>\n

\"DaraDara Calleary: The presidential election campaign was a ‘really disastrous episode’for Fianna F\u00e1il. Photograph: Alan Betson <\/p>\n

The starting contribution rate is 1.5 per cent per employee\/1.5 per cent per employer, and 0.5 per cent from the Government. These contribution rates will increase to 6 per cent from both employees and employers and 2 per cent from the State over 10 years.<\/p>\n

Membership is compulsory for the first six months, after which employees can opt out. Those who opt out will be automatically re-enrolled after two years in the hope that they might stay in the scheme in future.<\/p>\n

As of Tuesday, December 30th, 83,200 employers with an estimated 670,000 workers had signed up for the scheme.<\/p>\n

[\u00a0Calleary blocks employers looking to sidestep pension auto-enrolment for their workersOpens in new window<\/a>\u00a0]<\/p>\n

Mr Calleary outlined how a 25-year-old earning \u20ac25,000 is being asked, under the current rate, to put \u20ac375 a year into their My Future Fund account. Their employer puts in another \u20ac375 and the State contributes \u20ac125. He said that before any investment returns that 25-year-old could have \u20ac196,000 by the time they reach 66, adding that this is \u201ca game-changer for post-retirement\u201d.<\/p>\n

What would he say to low-paid workers who find their pay packet lighter as a result of My Future Fund contributions?<\/p>\n

\u201cI understand that at this point it\u2019s challenging. But it\u2019s challenging at any point\u201d and when they get to 66 they will have a fund in place \u201cto sustain them in their retirement\u201d, the Minister said.<\/p>\n

He said participation in My Future Fund will ensure that when workers move on to the State pension \u201cthey don\u2019t have a massive drop in income without having something to support them\u201d.<\/p>\n

There is an expectation that less than 10 per cent of workers who are auto-enrolled will drop out after six months but Mr Calleary noted that they will be automatically enrolled again two years later.<\/p>\n

[\u00a0The State\u2019s new auto-enrolment scheme: What does it mean for those with a private pension?Opens in new window<\/a>\u00a0]<\/p>\n

Employers that are not eligible for an exemption from the scheme through the existence of a sufficient occupational pension scheme for staff \u2013 and that fail to register with My Future Fund \u2013 will be pursued by the independent body overseeing it, the National Automatic Enrolment Retirement Service Authority (NAERSA). Ultimately such employers could be prosecuted and there is a regime of fines of between \u20ac5,000 and \u20ac50,000.<\/p>\n

Mr Calleary said there has been \u201cfantastic co-operation from the employer groups\u201d and there is \u201cno point\u201d in relevant employers not signing up as their contributions are due to start from January 1st and unpaid contributions will be sought retrospectively. <\/p>\n

While auto-enrolment will help with the cost of supporting the State\u2019s ageing population in the coming decades there are still challenges in this area. <\/p>\n

The Government\u2019s recent Future Forty<\/a> report set out the fiscal and economic outlook to 2065. It predicts that, \u201cby 2040, the cost of providing pensions will have nearly doubled in real terms, compared to 2025, and is projected to triple by 2060.\u201d <\/p>\n

Notwithstanding the changing demographics, Mr Calleary said the State pension age \u2013 which stands at 66 \u2013 would not be increased by this Government.<\/p>\n

The Future Forty report sets out how under a \u201ccentral scenario\u201d the Republic\u2019s \u201cold-age dependency ratio will rise significantly\u201d and this \u201cwill place significant pressure on public finances, pensions and healthcare services\u201d. It states: \u201cContinuing to enhance the management of migration can help sustain a larger working-age population, alleviating some of the pressures from these demographic shifts.\u201d<\/p>\n

Immigration has been a contentious issue in recent times. Mr Calleary said \u201cwe need sustainable migration\u201d. The work permit system, aligned to where labour shortages are, is \u201cworking well and should continue\u201d, he added.<\/p>\n

Asked about Fianna F\u00e1il\u2019s ill-fated presidential election campaign, the Minister said the party\u2019s ardcomhairle needed to be ready to make proposals for changes in how the party selects presidential candidates in advance of its next ardfheis. \u201cWe made mistakes\u201d, he said, describing the election as a \u201creally disastrous episode for the party\u201d.<\/p>\n

He stated his belief that Taoiseach Miche\u00e1l Martin<\/a> should continue to lead Fianna F\u00e1il into the next general election \u201cif that\u2019s his wish\u201d. <\/p>\n

Would he like to be leader of Fianna F\u00e1il himself someday? <\/p>\n

\u201cI\u2019ve never considered it, genuinely. There\u2019s no vacancy and I wouldn\u2019t consider it in the context of there not being a vacancy,\u201d Mr Calleary said. \u201cI don\u2019t do parlour games.\u201d<\/p>\n

He said he had a number of roles \u2013 Minister for Social Protection; Minister for Rural and Community Development and the Gaeltacht; and TD for Mayo, and \u201cI\u2019ve enough for doing without getting up every morning and imagining what I could be.\u201d He said: \u201cI\u2019m very, very honoured to be doing the job that I am.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Workers who participate in pensions auto-enrolment can avoid a \u201cmassive drop\u201d in income when they retire, Minister for…\n","protected":false},"author":2,"featured_media":23329,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[16361,138,97438,128421,246,118817,111,139,69,2180,244,245,128422],"class_list":{"0":"post-211345","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-auto-enrolment","9":"tag-business","10":"tag-dara-calleary","11":"tag-fianna-fail","12":"tag-finance","13":"tag-micheal-martin","14":"tag-new-zealand","15":"tag-newzealand","16":"tag-nz","17":"tag-pension","18":"tag-personal-finance","19":"tag-personalfinance","20":"tag-presidential-election"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/211345","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=211345"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/211345\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/23329"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=211345"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=211345"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=211345"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}