The new auto-enrolment pension scheme will result in a “significant add-on” cost to farmers who have people employed on their farms, Martin Clarke of ifac has said.
Giving an example, Clarke, a commercial manager with ifac, said that an employee on a gross payment of €25,000 will cost the employer €375 per year in years one to three of the new My Future Fund scheme.
This will rise to a cost of €1,500 per year from year 10, he told farmers at an IFA meeting in Athenry, Co Galway, on Thursday night.
The scheme “will be good for employees” who don’t have a pension scheme in place, Clarke said, likening it to the old Special Savings Incentive Account (SSIA) scheme of 2001/2002.
Additional voluntary contributions (AVCs) from employees are not allowed under the scheme, which Clarke said was, in his opinion, "an error".
Paperwork
Outside of the direct cost to farmers with employees, Clarke said the pension scheme will result in more administrative work for farmers.
“This will bring additional administrative work for farmers in the form of paperwork," he said.
Clarke added that employee contracts will need to be amended to include this pension policy.
“Even if you’re employing someone three or four days a week, you’re obliged to give them a contract,” he said.
One farmer from the floor raised the proposal from Brussels in the next CAP that farmers over retirement age should not receive both the state pension and EU direct payments.
In response, Connacht IFA regional chair Brendan Golden said that the European Commissioner Christophe Hansen had put that proposal out there, that “older farmers shouldn’t be getting both the pension and CAP payment”.
“We know the pressures farmers are under in this country and that’s something we have made very strong points to the Minister for Agriculture on.
"There’s no way we’re going to go down that road unless there’s a proper structure in place to support both sides,” he said.
What is the new pension scheme?
From 1 January 2026, employees aged over 22 years of age who are earning €20,000 per annum or more and who are not already contributing via their payroll to pension will be automatically enrolled into the scheme.
For every €3 a worker saves, the employer will add €3, and the State will add a further €1 turning a €3 contribution by the employee into savings of €7.
An employee who does not want to be a part of the My Future Fund scheme can opt-out after six months and their personal contributions will be returned to them.
For more, see next week's Irish Farmers Journal and Irish Country Living.
Read more
40,000 older farmers face farm payments wipeout
Money Mentor: the new pension rules and your small business
The new auto-enrolment pension scheme will result in a “significant add-on” cost to farmers who have people employed on their farms, Martin Clarke of ifac has said.
Giving an example, Clarke, a commercial manager with ifac, said that an employee on a gross payment of €25,000 will cost the employer €375 per year in years one to three of the new My Future Fund scheme.
This will rise to a cost of €1,500 per year from year 10, he told farmers at an IFA meeting in Athenry, Co Galway, on Thursday night.
The scheme “will be good for employees” who don’t have a pension scheme in place, Clarke said, likening it to the old Special Savings Incentive Account (SSIA) scheme of 2001/2002.
Additional voluntary contributions (AVCs) from employees are not allowed under the scheme, which Clarke said was, in his opinion, "an error".
Paperwork
Outside of the direct cost to farmers with employees, Clarke said the pension scheme will result in more administrative work for farmers.
“This will bring additional administrative work for farmers in the form of paperwork," he said.
Clarke added that employee contracts will need to be amended to include this pension policy.
“Even if you’re employing someone three or four days a week, you’re obliged to give them a contract,” he said.
One farmer from the floor raised the proposal from Brussels in the next CAP that farmers over retirement age should not receive both the state pension and EU direct payments.
In response, Connacht IFA regional chair Brendan Golden said that the European Commissioner Christophe Hansen had put that proposal out there, that “older farmers shouldn’t be getting both the pension and CAP payment”.
“We know the pressures farmers are under in this country and that’s something we have made very strong points to the Minister for Agriculture on.
"There’s no way we’re going to go down that road unless there’s a proper structure in place to support both sides,” he said.
What is the new pension scheme?
From 1 January 2026, employees aged over 22 years of age who are earning €20,000 per annum or more and who are not already contributing via their payroll to pension will be automatically enrolled into the scheme.
For every €3 a worker saves, the employer will add €3, and the State will add a further €1 turning a €3 contribution by the employee into savings of €7.
An employee who does not want to be a part of the My Future Fund scheme can opt-out after six months and their personal contributions will be returned to them.
For more, see next week's Irish Farmers Journal and Irish Country Living.
Read more
40,000 older farmers face farm payments wipeout
Money Mentor: the new pension rules and your small business
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