My Future Fund: Fewer Than 1 in 5 Workers Expect Sufficient Retirement Income
Fewer than one in five workers believe the new My Future Fund auto-enrolment system, which enrolled almost 770,000 workers on January 1st, will provide sufficient retirement income. The scheme deducts 1.5% of wages, matched by employers, with State contributions, but a survey found 8 in 10 workers doubt its sufficiency alone.
A new survey reveals that fewer than one in five workers eligible for the My Future Fund auto-enrolment system believe it will provide a sufficient income in retirement. This scheme, which compulsorily signed up almost 770,000 workers on January 1st, aims to ensure a reasonable retirement income beyond the State pension.
The My Future Fund deducts 1.5 per cent of a worker’s gross wage monthly, matched by the employer, with the State adding €1 for every €3 contributed by the worker. These percentages will gradually increase, reaching 6 per cent of wages by 2035. Deductions apply to workers aged 23-60 earning over €20,000 annually, without other pension payments besides PRSI. From July 1st, a two-month window opens for workers to opt out.
Ask Acorn, a network of financial intermediaries, conducted the survey of 1,000 eligible workers, finding that eight in 10 do not believe the scheme alone will suffice for retirement, with one in three deeming it «nowhere near enough». Keith Butler, Ask Acorn CEO, noted that contribution limits restrict the system’s ability to provide a sole sufficient income. He added that auto-enrolment lacks flexibility in contribution rates and caps employer and State contributions at €80,000 of annual salary. While not a complete solution, it can be a key part of a pension mix, supplemented by personal and State pensions.