Explainer: What will auto-enrolment mean for execs on cusp of €2m pension limit?
High paid executives who no longer pay into their pension to avoid the Standard Fund Threshold will be subject to auto-enrolment
As businesses trudge on under the unrelenting pressure of rising costs, small firms have expressed concerns around the impact that the incoming auto-enrolment (AE) pension regime will have on their bottom lines.
However, questions around the system, which will see all those not contributing to a pension pot automatically enrolled in a new state-backed scheme, won’t be confined to owners of small businesses struggling to stay afloat.
High-paid executives who no longer pay into their pension due to the €2 million Standard Fund Threshold (SFT) – contributions above which are subject to a tax rate of up to 68.8 per cent, according to KPMG – will be inadvertently enrolled in the new scheme when it is launched in January.
