Denis Naughten (Roscommon-Galway, Independent)
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Dr. Begg is making the point that we need to introduce this as quickly as possible. The committee previously heard evidence from the pension industry, which has suggested going down a road similar to that pursued in New Zealand, where, in effect, it is light-touch control from a government perspective. The government just administers the fund, in that it distributes it to the various companies to use it. The proposal we have here under auto-enrolment is more like the Nordic or UK models, where there is far more state control in terms of how that money is invested. The industry is saying to take the approach we are taking would take a minimum of 48 months to establish but if we were to take the approach where, in effect, the State only gathers the money for the pension industry, it could be operational within 18 months. I invite Dr. Begg to comment on that in the context of the evidence he has given.

The Pensions Authority has considered examples of what works well in other jurisdictions. I ask Dr. Begg to indicate the benchmarks among OECD countries in terms of a model that would meet the requirements we have here in Ireland.

This may be an issue more for Mr. Kennedy than for Dr. Begg. I refer to the capacity and resources which the Pensions Authority has to regulate and manage this substantial fund we are discussing.

The industry has indicated that a fee cap at 0.5% of the overall fund is going to make it very hard to get a substantial fund like this up, running and operational, and to meet the legal requirements that are set out and overseen by the Pensions Authority. The fear is that if we follow the approach that is being taken here, a significant amount of the funds put in by individual employees will have to be consumed to actually get the structures up and running. From the point of view of the Pensions Authority and its role in regulating the industry, do the witnesses believe that meeting the requirements of a substantial new fund based on a fee cap at 0.5% is achievable?