Dr. Claire Keane:

If I can jump in there, it is probably going to cost the State more in the shorter term giving this top-up. The majority of people who will be auto-enrolled will be earning under €30,000 or €40,000 a year. Many of them will be paying either no income tax or tax at the standard rate. They would be getting either 0% or 20% relief, certainly in the shorter term and for people who will have a flat earnings structure over their lives, so they may never enter the 40%, there will be a benefit to them but a cost to the State in doing that. As Dr. Roantree said, in order to auto-enrol people and in trying to target these people, we do not have to do that. The default option works.

There is also the issue of those who were in pre-existing schemes who have the exact same earnings over their lifetime. They are going to get less State support than somebody with the same earnings who is going to be on an auto-enrolment scheme. That could create friction in moving employment. If I am getting a benefit in one employment and I was to move to a company where it is not auto-enrolment and there is a pre-existing scheme, it might come into my mind that I could be worse off in terms of State support for my pension.