Mr. Tim Duggan:

Revenue collects social insurance for us and that is the end of it for Revenue. However, the difficulty with AE contributions is that is not the end of it. It goes on to another party, gets invested, grows and has to come back. It is hard to do this in the air, but think of it this way: Employment - Revenue - CPA. The CPA tells Revenue that someone has to be enrolled on a particular day at a particular contribution level. Revenue must process that and get the information out to the employer who must process it in payroll. The Employer must send the data back to Revenue and Revenue must reconcile it with the instructions that came from the CPA to ensure the information is correct. If it is not, Revenue must follow up on it. If it is correct, Revenue must update the CPA. That is just the data. Then the money transfer has to be done. Every time any kind of transaction takes place it involves this three way engagement that is going on all the time with reconciliations, reports and so on. Why do that when we can simply build a direct link between the CPA and employers that uses exactly the same kind of infrastructure as Revenue?

Revenue issues a revenue payroll notification to payroll managers which tells the Department of Social Protection that Tim Duggan's tax credit has increased to X. The employer does not have to do anything. The payroll software takes that and automatically does the recalculations because payroll software developers have built that functionality into their systems. AE will work in the same way. When a payroll starts to run, it will immediately go to the CPA and check if there are any instructions. If there are, they will be applied to payroll automatically and directly. That means there will not be any reconciliation with a third party. If we were to do it through Revenue, Revenue would have to develop IT systems and we would have to get the CPA to do so and build a lot of reconciliations and reporting into it that are otherwise unnecessary. That is why it would not be cost effective and would probably cost a lot more. That is just an example. By the way the NTMA engages with private sector investment managers in exactly the same way as the CPA would. It is the same thing.