Mr. Tim Duggan:

Yes, there were two other issues the Chairman asked about. I note ICTU last week suggested that 0.5% was too high. I honestly do not know or understand why it would suggest that or what it is basing it on. Fees for pension schemes are typically considerably higher than that and, therefore, that is very low by normal standards. That is the first point I would make. Second, we have not said the fee will be 0.5%. We have said the absolute maximum we will tolerate is 0.5%. The actual rate will emerge in two ways: the procurement exercises that are run to engage commercial providers of the various facets of the system, and the costs of running the system. The combination of those will eventually allow us to determine the actual rate.

Looking at systems elsewhere, it can be seen that 0.5% is quite low, and the complexity of the fee structures around pensions is incredible. The European institute of occupational pensions published a list of the different types of charges that can be imposed on a pension. In Times New Roman 12 point font, it fills a page. It is an incredibly long list. Setting a 0.5% ceiling is incredibly ambitious but we are determined to achieve it. The scale is one of the reasons we are determined to achieve. We think, for the scale we will be bringing to the market, we will be able to negotiate those kinds of price points.

The second source of encouragement is that National Employment Savings Trust, NEST, in the UK has just about achieved it. It has a significantly greater level of scale than we do. It has 11 million members. It has multiple fees in its system but the combination of them comes to 0.48%. We think the structure and operation of the central processing authority, CPA, and how it will do its business is not hugely dissimilar to how NEST does its business. That, in our view, allows us to suggest that those fees are attainable. We will be very aggressive in the contract negotiations around them anyway.

In saying all of that, it is our absolute determination to have them as low as possible because one of the massive barriers to pension take-up in Ireland, in our view, has been the inordinately high fees that can be imposed by providers. It is our intention to make that as low as possible in those negotiations. Where we achieve that, that will be reflected. The CPA will be non-profit-making. Therefore, that money will be directed back directly to the participants, and the way that will be done is by reducing the fees from then on.

As for trade union representation on the board of the CPA, no decision has been made yet on the composition of the board. In fact, that is something we are working on with the help of the European Commission right now. It is critically important the board is competent and has all of the necessary capabilities, skills and experiences to run this properly. It will need people who have pensions expertise, investment expertise, risk expertise, audit expertise, communications expertise etc. to make sure this system works incredibly well and for the benefit of the participants, and that they are capable of engaging credibly with the markets they will have to engage with. Those are the kind of people who are critical to that board.

I note that in the UK - NEST being the big one there - they do not have either employer or worker representation on the board of NEST. They have concentrated on those skills I outlined. What they have is a worker panel and an employer panel that the board consults regularly. That is another option that can be looked at. As I said, no determination has been made yet. It is being teased through at present. I note that congress has expressed that view and that interest.