From 2022 employees without private pensions will be enrolled automatically in a retirement savings scheme, under new pension reforms announced by the Government.
The introduction of "auto enrolment" is one of a number of pension reforms which have been announced by the Government today.
These also include a move to a "Total Contributions Approach" for the State (contributory) pension from 2020, replacing the controversial "yearly average" approach.
According to a statement from Taoiseach Leo Varadkar, Minister for Finance and Public Expenditure and Reform Paschal Donohoe and Minister for Employment Affairs and Social Protection Regina Doherty the Total Contributory Approach (TCA) will mean "a person's contributory pension will be proportionate to the contributions they make" during their working life.
The statement said this will include "fair regard for periods of child rearing, full time caring and periods in receipt of social welfare payments".
"With effect from March 2018 (with arrears paid at the start of 2019) people who reached pension age from September 2012 will be offered the option of transferring to a TCA model," the statement said.
The TCA model will be proposed for all new pensioners from 2020.
Those with few social insurance contributions who would be at a disadvantage under the new system will be able to opt for the current non-contributory pension.
The value of state pension payments will also be maintained at 34% of average earnings. Future increases will be explicitly linked to changes in prices and wages.
The Taoiseach said the reforms would lead to "a more equitable and transparent state pension system".
"To do this, we will put in place important pension reforms and also promote better levels of private pension coverage to help supplement future retirement incomes," he said.
It was also announced today that there will be no further increase in the state pension age before 2035. An increase in the age to 67 in 2021 and to 68 in 2028 have already been legislated for.
The Government also said it plans to transpose an EU directive in 2019 to improve the governance and regulation of private pension schemes.
It also said it intends to protect the rights of pensioners in defined pension schemes while also protecting the solvency of the employer and employment of existing workers.
The Irish Congress of Trade Unions has described today's pension reforms as "potentially significant in the development of future pension policies."
Congress General Secretary Patricia King said the plan to move to a Total Contribution Approach will go some way towards addressing the "inequality of the current eligibility criteria for the state pension".
Ms King also noted that the proposal to introduce an auto enrolment occupational pension scheme for all workers coincides with Congress submissions to successive governments over a number of years, on the issue.
"While the implementation of any such scheme will be a matter for consultation between unions, employers and government, it is critical that we move to address this major deficit in our pensions system, with some 60% of private sector workers currently without workplace pension coverage and forced to rely solely on the state pension in retirement," Ms King stated.