Seán Sherlock (Cork East, Labour) | Oireachtas source

I move amendment No. 5:

In page 42, line 22, to delete “years 7 to 9” and substitute “years 4 to 6”.

The Labour Party acknowledges that the authority will need time to draw up and apply standards to occupational and private pension contributions because it is not as simple as comparing like with like. For example, auto-enrolment contributions would be deducted from after-tax earnings, while private pension contributions are deducted from pre-tax income. We agree with the Minister that there can be no further delay in getting auto-enrolment up and running for the 800,000 eligible unpensioned employees. We absolutely agree that the time for talking is over. The general secretary of the Irish Congress of Trade Unions, Owen Reidy, pointed out the following in a press statement ahead of the Second Stage debate:

It will be a bitter pill to swallow for workers who find themselves with a lower or, in cases of personal pensions, no employer contribution all because they had proactively taken steps to save for their retirement prior to auto-enrolment. More ambition and an amendment are needed.

That is what the Labour Party amendment is calling for - more ambition. The deadline to draw up and apply standards to levels of employer and employee pension contributions should be reduced from the beginning of years 7 to 9 to the beginning of years 4 to 6. CSO figures on pension coverage shows that one in 20, or 5%, of employees with a pension have a PRSA only. Under this section of the Bill, these workers will not be automatically enrolled or guaranteed a minimum employer contribution to their retirement savings account for up to seven years after auto-enrolment comes into operation. If they are on average earnings, which is approximately €922 gross per week, they will miss out on an employer contribution of up to €6,500. We have kicked the tyres on that.

Reducing the deadline to the beginning of years 4 to 6 gives the authority the time it needs to draw and apply the standards for exempt employment under the Act while drastically cutting the losses for retirement savings workers with no, or a low employer contribution, going into their pension pot. That is two thirds, give or take. A back-of-the-envelope calculation on that is €2,150 over years 1 to 3. That is what that amendment is about.