Dr. Laura Bambrick:

The upper age limit of 60 years just means that people will not be automatically enrolled for the first time if they are over 60 but they will continue in the scheme after they are 60. Given the commitment to keep the State pension age at 66 years, it would only allow an individual six years in the scheme. For thee first six years of this scheme, it is to be gradually introduced so people will only be paying 1.5% for years one, two and three while getting the same matching contribution from their employer and a reduced State contribution. In years four, five and six, they will pay at 3%. The pot will be very small. Even if we manage to get the half a percentage point fee reduced, it will still take a chunk off that. We do not believe it is efficient for the scheme or the individual. There may be some confusion in that people will think that workers will stop contributing at the age of 60, but that is not the case. It just means this is the age at which, for the first time, a person will not be automatically enrolled. We would not have concerns around that.

Regarding the lower age limit, if we retain the limit of 23 years, the lowest age limit in Ireland will be the highest in operation. In other countries such as Australia and New Zealand, the lowest age is 18 and in the UK it is 22 years. Our concern is that this is a very classist approach. It assumes that all young people will spend three or four years in college after doing the leaving certificate at 18 years and are entering full-time employment from the age of 22 and onwards.

Many young people will not go on to sit the leaving certificate examinations but will enter the workforce, including apprenticeships, going onto building sites and the shop floor. They begin their full working life at 16, 17 and 18 years of age. They are liable for PRSI. Why not make them liable and eligible for automatic pension contributions? They will be doing their 40 years' work from the ages of 16, 17 and 18. They will not be in a position, physically, to contribute to their auto-enrolment pension pot at 58, 59 or 60 years of age and beyond. The Department is likely to say it will make it voluntary that younger people can enter auto-enrolment in the next stage, but pensions must be part of good practice. It must be taken out so the employee never receives the money. It should go straight into the pension. It would then become an automatic learned good practice. Those are the two reasons. The age of 23 is too high by international standards and it does not take into account the lived experience of young people who do not take the route of third level education and who are not in a position to contribute to their future retirement savings into their late 50s, 60s and beyond.

As I mentioned, given the type of service that is being offered to people, everyone will be offered four types of product, namely, products that give high, moderate or low risks on return and, if people do not make a decision about the level of risk, they will be offered a life-cycle product. The age of the person going into auto-enrolment will be considered and people in their 50s will be offered a low risk product because if the market and investments hit a bump, they do not have enough years to recover that money. Given that these are not individualised, personalised products and given the large numbers that are going in, economies of scale can be achieved, so 0.5% is excessive. The number of providers is being limited to four so they will be guaranteed a large part of the market share. Also, as Deputy Kerrane mentioned, the amount paid over the lifetime of the pension should be capped. It should not only be a cap on what a person pays annually but if your pension pot is 40 to 45 years old, there should be a limit on what is paid.

Regarding the CPA, some people will ask why we are handing this money to private providers. If we look internationally, none of the schemes give it wholly over to a state-run provider of pensions. Australia has purely private provision. There is no state involvement. New Zealand has a mix of private, not-for-profit and for-profit providers. We are going for a mix. While we originally had concerns about that, there have been improvements to the operation of the central processing authority and we have received assurance and confidence from the officials and taken independent advice that the CPA will do enough work to protect members' money. My colleague can speak about the CPA.