Mr. Tim Duggan:

It is not arbitrary; it is based on analysis and research from various systems around the world and on the nature of demographics in Ireland. Dr. Laura Bambrick suggested last week that this might be classist but somewhere in the region of three-quarters of all the people aged between 16 and 23 in Ireland are in education. Ireland has a high rate of education attendance at that age group compared with other nations, and it goes well into people's 20s. We are one of the highest performing countries to term it that way. Therefore, people who are working in those age groups tend to be working, in the main, for that purpose.

They tend to be in casual and part-time work and they tend to be under the income thresholds that are set for auto-enrolment anyway. We discovered, when we analysed the labour market, that there was a massive flux in the volume of job changing and switching that goes on up to the age of 22. While there is some switching from the age of 23 on, and there is switching all the way to 60 plus, it levels off considerably from 23 on and, therefore, it is clear that the majority of people are going into more full-time employment at that age, rather than earlier. Earlier it tends, in the main, to be jobs that are either temporary, part-time, casual and for purposes other than main income generation.

PRSI is an entirely different thing to saving for a pension. If somebody starts work at 16, 17 or 18 then they want to protect themselves from a range of contingencies that could arise in that working life that have little or nothing to do with pensions. They want to protect themselves from: losing their job; illness; getting injured; developing invalidity; having to take time out to care for a loved one; medical treatments; and all of that. PRSI gives them that protective cover. Cover for contingencies that arise in a working life is what PRSI is primarily about at that age. The contributions someone makes are contributing, eventually, to his or her pension later in life.

However, if people start saving at 23, they have plenty of time to develop a very sufficient pot for their pension because it gives them 43 years of savings. If everybody did 43 years of savings we would not be having this discussion and there would be no need to do anything. The age limit of 23 is there deliberately because below that there are major flux issues in switching in and out of jobs and there are major administrative difficulties in dealing with the part-time nature of most of those jobs.

Then we run into affordability issues because the vast majority of people working in these age groups use all of their income for rent, college or transport. Therefore, imposing this on them unnecessarily did not seem like the best of ideas. We want to nurture and encourage people to continue with education. Those who are not in these circumstances can opt in and we will be encouraging people to do so. It is simply the difference between compelling people to be in and allowing them to be in. There is no barrier to people coming in at any of these ages.