Finance:Automatic enrolment
In public services, automatic enrolment defines programmes where citizens are automatically included unless they opt out.
Examples
There are various examples of automatic enrolment schemes in public services across the world. Examples of the use of automatic enrolment schemes in the public sector include in the enrolment of citizens into pension schemes and organ donation programmes.
Pensions
- Italy have an automatic enrolment programme as of 2007.
- New Zealand as of 2007.
- Pensions in the United Kingdom as of 2012.
- Turkey as of 2017.
- Lithuania as of 2019.
- Poland as of 2019.[1]
- Ireland will have it, it is expected to commence in 2024. [2]
Some countries have pursued schemes similar to automatic enrolment as seen in the above nations but have adopted slightly different approaches. Singapore is a nation that compels its citizens to save 30% of their income into a savings account, without the option of opting out. The savings go into the country's Central Provident Fund. [3]
United Kingdom
Automatic enrolment was introduced in the United Kingdom in 2012. The scheme initially covered all UK citizens in work aged between 22 and the state pension age who earned more than £8,105 a year (this amount rose to £10,000 in 2015), as well as all those not already enrolled in a workplace pension scheme. [4] The UK's Pensions Regulator hailed the success of auto-enrolment in 2019, with figures showing that 10 million more workers were now enrolled and saving into their pensions than in 2012. [5]
There has been widespread calls from within the pensions industry for the UK Government to increase the contribution level at which workers are automatically enrolled. It has been questioned as to whether the current role of 8% is large enough to provide a healthy retirement income. Industry figures often call for the contribution rate to be scaled up to above 12% but some have even called for it to go as high as 16%. However, there are some who question how this would affect the incomes of those on lower salaries. [6] [7]
Organ donation
- Organ donation in some countries such as Austria[8]
Benefits and drawbacks
Automatic enrolment is recommended in the book Nudge by Thaler and Sunstein, as it promotes higher participation rates than when citizens are left to arrange their own pensions.
Libertarians argue against automatic enrolment as it impinges on an individual's freedom of choice.
References
- ↑ "Home" (in en). https://www.oecd-ilibrary.org/sites/6e196cbb-en/index.html?itemId=/content/component/6e196cbb-en#:~:text=Six%20countries%20have%20introduced%20automatic,the%20United%20Kingdom%20(2012)..
- ↑ "Automatic Enrolment Retirement Saving System Bill". Mason Hayes & Curran. https://www.mhc.ie/hubs/legislation/automatic-enrolment-retirement-saving-system-bill-2022.
- ↑ Wolf, Martin (2023-02-19). "Britain can learn from Singapore on savings". Financial Times. https://www.ft.com/content/0f16f087-ef99-4d8d-90b1-d594afc2c85e.
- ↑ Jones, Rupert (2012-10-01). "Auto-enrolment pensions: all you need to know" (in en-GB). The Guardian. ISSN 0261-3077. https://www.theguardian.com/money/2012/oct/01/auto-enrolment-pensions-all-you-need-to-know.
- ↑ Collinson, Patrick (2019-10-24). "Watchdog hails success of auto-enrolment pensions" (in en-GB). The Guardian. ISSN 0261-3077. https://www.theguardian.com/money/2019/oct/24/watchdog-hails-success-of-auto-enrolment-pensions.
- ↑ Uddin, Rafe (2023-02-24). "Boost your pension every time you have a pay rise, says IFS". Financial Times. https://www.ft.com/content/74cd249a-427d-495e-bed8-b5ee634fbf0c.
- ↑ Editor, Patrick Hosking, Financial (2023-09-12). "Contribution to pensions must double, says Abrdn chief" (in en). ISSN 0140-0460. https://www.thetimes.co.uk/article/contribution-to-pensions-must-double-says-abrdn-chief-mtlt7ntg5.
- ↑ Thaler, Richard H. (September 26, 2009). "Opting in vs. Opting Out". The New York Times. Archived from the original on March 8, 2014. https://web.archive.org/web/20140308024415/http://www.nytimes.com/2009/09/27/business/economy/27view.html?_r=0. Retrieved March 7, 2014.
External links
https://web.archive.org/web/20161118041846/https://naeh.co.uk/ National Auto Enrolment Helpline
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