22/07/2024

LEGAL UPDATES

1. Extension of paid Parent’s Leave and Benefit

The Parent’s Leave and Benefit Act 2019 (Extension of Periods of Leave) Order 2024 has been signed into law and, with effect from 1^st August 2024, parents will be able to avail of nine weeks paid Parent’s Leave and Benefit during the first two years of a child’s life, or in the case of adoption, within two years of the placement of the child with the family.

The leave will also apply retrospectively to parents who have taken seven weeks’ Parent’s Leave prior to August 2024 (i.e. they will now have an entitlement to an additional two weeks) if their child had not reached the age of two when the leave is taken (in the case of an adopted child it is still within two years of the date of placement of the child when the leave is taken).

A copy of the Parents Leave and Benefit Act 2019 is available here.

A copy of the Parent’s Leave and Benefit Act 2019 (Extension of Periods of Leave) Order 2024  is available here

Members should update their internal policies accordingly.

2. The Automatic Enrolment Retirement Savings System Act 2024

The Automatic Enrolment Retirement Savings System Bill 2024 has been passed by both Houses of the Oireachtas and on 9^th July 2024 was signed into law by President Higgins.

The Act provides for a new retirement savings scheme for workers who earn over €20,000 and who are not already members of a pension scheme.

The Act also establishes an independent public body, the National Automatic Enrolment Retirement Savings Authority (NAERSA) to administer the system and ensure compliance, under the auspices of the Department of Social Protection.

Tata Consultancy Services (TCS), a leading global IT services, consulting, and business solutions organisation, has been selected to provide this administration as a managed service.

NAERSA will identify and enrol participants, collect and pool contributions, arrange for the investment of contributions, manage participant accounts including opt-outs, suspensions and opt-ins, and facilitate the payment of savings at retirement. This will mean employers will have minimal administrative work in relation to Auto Enrolment.

We previously set out details of the proposed scheme to members  here, however we have summarised the main provisions below.

• All employees not already in an occupational or equivalent pension scheme, aged between 23 and 60, and earning over €20,000 across all of their employments, will be automatically enrolled. Exempt employment is defined in chapter 2 of the Act.
• Auto Enrolment will commence in 2025 on a gradual phased basis over a 10 year period. Initially employer and employee contributions starting at 1.5% and increasing every three years by 1.5% until they eventually reach 6% by Year 10 (2034).
• Matching contributions will be made by employers to those contributions made by employees up to a maximum of €80,000 of earnings.
• The State will also top up contributions by €1 for every €3 saved by the employee, up to a maximum of €80,000 of earnings. This is in addition to the €3 that will also be contributed by the employer.
• The system will be voluntary but will operate on an ‘opt-out’ rather than an ‘opt-in’ basis.
• Eligible employees will be automatically enrolled/ ‘opted-in’ but will have the choice after six months’ participation to opt-out or suspend participation.
• Participants will have a range of four retirement savings strategies to choose from. Those who do not express a preference for any strategy will be enrolled into the default strategy.
• Workers moving between jobs will not have to change pension schemes or join a new scheme. They will remain members of the Auto Enrolment scheme on a ‘pot-follows the member’ basis. In addition, people with multiple employments will have their pension savings consolidated into one AE ‘pension pot.’

A copy of The Automatic Enrolment Retirement Savings System Act 2024 is available here. We will keep Members updated of the provision of Regulations for any matter referred to under the Act.