Dr. Laura Bambrick:

I will start with the comment that this is costless to the State. That is far from the truth. What is being recommended in the proposed legislation is that for every €3 an employee puts in, the employer will match that with €3 and the State will put in €1. The State is therefore providing a 2% input into the pension pot. It is a significant amount of money and other people before this committee will wonder how the State will find the money to ensure in the long term that it will be able to finance this move to auto-enrolment.

We support the model whereby the State puts money in versus giving tax relief. We know tax relief is difficult to understand because if most people understood the tax relief that you can get on pensions savings, we would not be here today and the uptake would be much better. The best way of getting money legally is by investing in your pension. As it is so complex to the ordinary person who has more things to be dealing with and thinking about day-to-day, the best way is to set it up like the old special incentive savings schemes, SISS, which was well received by the Irish public. This will be the same thing. There will be a feature on a person's phone, an app, where they will be able to see on a weekly or monthly basis, whatever way they are paying, their pension pot grow. They will be able to watch every €3 that they put in grow to €7. That is much more attractive to people.

Apathy will stop people from opting out. They will just keep doing it. This is the same reasons they never get around to joining a pension. The international evidence shows that people do not get around to opting out of an auto-enrolment pension. The other big driver will be around the contribution. This SISS approach is far from costless to the State but it is much more beneficial to the worker who can see the benefits of investing into their pension pot. We are hugely supportive of this. Obviously, we would prefer if the State contribution was higher and we have mentioned that. However, we have no dispute with the mechanism.

Although it may not be in this Bill, there is a commitment at a later stage that workers will be able to make voluntary contributions and that will address the issue the Senator mentioned regarding a person who is nearing retirement and who wants to make investments into their pensions. There will be provisions for that.

I am not sure whether there was any discussion around the class K. We will come to the Senator on that. I apologise that I do not have any information on that at the moment.