Mr. Robert Nicholson:

Yes, and there was also a general question about who manages the system. As I think I said earlier, the CPA is there to look after the individual's interest in the first place. It is setting the standards, asking providers who have significant scale and the capacity to deliver to tender to deliver this service. They would set the standards on the number of funds, how the funds would be broadly structured and how charges are presented to individuals so that one is readily comparable with another. The CPA would look after quality assurance and the regulator, the Pensions Authority, would ensure legal compliance with whatever legislation is in place. That is the principle.

On scale, the suggestion that there is a ready body of financial providers out there ready, as the Deputy put it, wringing their hands. At those charges, it is a really competitive service to deliver.

We need to model it further but we are now seeing international systems and large providers getting involved in this space partly because they have to because they see the line of sight over 20, 30 or 40 years. They know not being involved is not the best thing for their businesses. Initially they need to make large capital outlays to build the systems to accommodate this. They are frequently loss-making early on and they look at commercial capacity over the longer term rather than the short term. There has been a lot of interest. In the document we say there will be four providers initially but after five, seven, or ten years, it will be retendered and the best in show will get the action. Registered providers have told us they may not have enough time over five, six or seven years to make it commercially viable. How do we structure it to achieve those two things? We have looked at data which highlights that a large capital outlay is required. That is also why we say in the document that each provider will have a statutory duty to deliver services to all comers because we know somebody on €5,000, €6,000 or €10,000 who decides to opt into the system will be loss-making for the provider. We have said they will have to provide services. There is much work to do and we intend to build up intelligence over the next number of months and have a much closer look at similar administration systems in Sweden, Malaysia, New Zealand and a couple of other states. We will look at them and see exactly where that role should start and finish but the intention is to make all of these decisions in the best interest of members. That is why we go to the idea of the fiduciary responsibility of the providers operating the system. There recently has been a royal commission in Australia. It sounds as if it is far away but its systems are quite similar. The royal commission in Australia, which looked at the whole financial services system delivering pensions, raised questions about that structured fiduciary duty versus large insurance companies or banks and so on that are providing services. It raised questions about decisions that may not have been made by those large private institutions in the same way if they were trust-based schemes. There are concerns around costs and further outcomes for individuals. We need a structure, which we do not have at the moment in Ireland, to marry those two things, that is a contract between the individual and the provider and a fiduciary responsibility. Hopefully we have enough imagination to come up with a structure along those lines.

With regard to the forms, at the moment we table low, medium and moderate risk. That is to project the idea that the risk goes two ways. One can put one's money in the bank or under the bed and it will be there on one's retirement but the problem is if one has 20 years of retirement and wants to achieve a level of adequacy that goes beyond the saving, one needs to make it work. As a broader economy, we need to make sure that money is working to generate income for us and for the economy more broadly. Typically speaking, pension funds have an element of investment around them. If an individual does not want to do that, there should be a choice for that person. Early on in a person's working career there is investment in equities to generate a return to provide that type of adequacy. Finding the right balance between those two things and understanding what an individual actually wants is a job that has not been done yet and which needs to be done. Risk goes two ways, not just to protect capital cash but to protect the chance of achieving what one wants to achieve. To an extent that is down to a qualified decision by the individual. That means education is a concern. It is about making sure when default choices are made that an individual understands what he or she is getting into.