Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I acknowledge the amendments tabled by Deputy Ó Laoghaire, but the auto-enrolment scheme will not be invested in through private pension providers. That will not happen. It will be invested in through investment providers in the same way the NTMA invests the State's money. This will involve the savings of members of the scheme. It is set up in such a way as to protect members. It is a big body of work.

I am sorry that I cannot accept Deputy Sherlock's amendment. I will make it very clear, however, that I do not want to see the displacement of occupational pension schemes either, no more than he does. As a very practical consideration, the amendment cannot be incorporated into the AE Bill at this time as preliminary legal opinion expressed to my officials suggests that this type of provision would be unconstitutional with regard to infringing the property rights of employers and their right to earn a livelihood. My officials are in the process of following up on formal legal advice on this question. I will provide that when I get it.

While some worker representatives, including ICTU, have clearly expressed to me and my officials a fear that the introduction of AE will lead to the levelling down or closure of existing occupational pension arrangements, I believe this fear is unfounded because my Department has found no evidence whatsoever that such a scenario has occurred following the implementation of AE-type schemes in other jurisdictions. In the UK, for example, despite significant concerns that automatic enrolment would result in the levelling down of existing pension arrangements, what came to pass was that many employers decided to improve their existing pension plans by contributing more than the minimum contribution rates. They saw such an offering as helping with the recruitment and retention of good employees. I believe that a similar result is likely here. We have to remember that we are in a very tight labour market, employers are competing for staff, and they will have to continue to offer employees incentives to work for them. Automatic enrolment will be an incentive for people to either stay with their employer or take up employment where a pension is available.

I will keep Deputies informed on the outcome of the legal considerations as the Bill progresses. However, I do not believe this amendment is warranted at this stage or, indeed, can be protected from legal challenge. We are one of the last countries coming to the table on this and, as I said, there is no evidence of what has been suggested, namely that auto-enrolment will level down pension provision. The evidence is that employers have improved their schemes and membership of those schemes has increased and not decreased. I expect that to be the case here as well.

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