Mr. Tim Duggan:

We will look at the suggestion of the thresholds being set out in a regulation rather than in primary legislation. There are arguments both ways. I think the Office of the Parliamentary Counsel to the Government, OPC, would be of the view that they are such fundamentals that they should be in primary legislation. Therefore, when changes are being suggested they should go through the full rigours of the legislative process rather than being at the whim of a Minister, as it were. I know it is not that simple, but the Deputy gets the point. We will discuss that with the OPC again, but that was its initial view when we discussed it previously. That is why it is as suggested, but I take the Deputy's point.

On tax relief versus top-up, in December when we discussed this, I recall highlighting that three quarters of the people that we expect to be auto-enrolled are going to be either at the standard rate or no rate of tax. Therefore, tax relief either gives them quite a small incentive or no incentive at all. Given that it is three quarters of the people who are going to be auto-enrolled, the Government is of the view that that cannot be the outcome. Therefore, that is why the Government has decided against it. I remember sitting in Cabinet meetings listening to Ministers discussing this and they were very clear that there had to be equality of treatment for all participants in the scheme. The tax relief system just does not do that, as it is currently structured. Either we change that completely or we do something different with this. That is all predicated on the principle that everyone in the scheme should be treated equally from an incentivisation perspective. If you do not buy that argument, tax relief is fine, but if you do buy it then tax relief is not fine. That is the balance that we have tried to strike.

As I have said, I do not believe that portability is going to be a major issue in the first iteration of this scheme at all. I think that the numbers that could potentially need or want to do that will be very low. There is an absolute commitment - and that is why it is set out in the design document - that this will be looked at once the system is up and running, we have the initial implementation done and we have people saving. Then we can concentrate on those more marginal issues, if I can put it that way. There is a thing about tax relief. It is is somewhat nebulous. People do not necessarily get it. I recall highlighting that in December. They do not necessarily see it benefiting them. Typically, they do not understand it very well. That came across to us incredibly clearly in focus groups during the public consultation exercises. People did not get it, whereas they really did get the top-up. They understood how that was the Government and the State giving them money to help them with their retirement savings. It was obvious and they would be able to see it when they logged into their account. They would see their contributions, their employer contributions and the State's contributions. That was a really key consideration for Ministers when they were deciding on this, that it is not just good enough for perhaps some of the lowest-income individuals in the country to be put into a pension scheme. It is equally important that they see how the Government is helping them with that.

Equality of treatment, and how they are being helped with their retirement savings being obvious and available, were key considerations. As I said in my opening statement, that it is a mandatory system means the Government was keen that, because people were being compelled to join the scheme, they would be treated well and equally such that one person's euro did not have any greater value, from a State's incentivisation perspective, than another person's. That was very important. We can share information with the committee relating to some of the alternatives we looked at. We looked at three or four different models that could have been applied. It is a bit dense and technical but we have no difficulty with sharing it. Members will see it is complicated and would result in additional costs and, as they read through it, they might find it a little difficult to comprehend at times. That will give them a sense of how difficult it would be to explain it subsequently. There are no easy solutions for this.

Tax relief does not necessarily go to the person who has the pension scheme, depending on the household arrangement, and the committee had some discussion about that last week, whereas the State top-up does. It does not go anywhere else but directly to the person who has the pension scheme, and that is something of a difference between the two. Deputy Ó Cuív is looking at me quizzically, but I say it because it goes directly into the pot. It does not go into a calculation of tax relief on the main earner, for instance. This tends to impact on women-----