Cormac Devlin (Dún Laoghaire, Fianna Fail) | Oireachtas source

I have spoken on auto-enrolment previously, but I welcome these statements. I thank the Minister for Social Protection, Deputy Dara Calleary, and his officials for getting this long-promised reform over the line.

My Future Fund is about one simple idea: if you work, you should build a pension automatically, with your employer and the State helping you every day. From 1 January 2026, every employee aged between 23 and 60 who earns €20,000 or more and who is not already in a scheme will be enrolled by default. Contributions will be phased in sensibly, starting at 1.5% both for workers and employers, and rising in steps to 6% over a decade. The State will make a top-up of €1 for every €3 the worker contributes. This means that every €3 a worker saves will become €7, and that is before it is invested. For workers, that is real money compounding quietly in the background while they get on with their lives. Compounding delivers real returns. The secret is to start as early as possible in order to maximise returns over time.

My Future Fund will tackle a very real gap. Too many private sector workers still do not have occupational pensions. We cannot leave people to face a sharp drop in living standards on retirement, reliant solely on the State pension or whatever savings they can scrape together. My Future Fund fixes the defaults. It is opt out rather than opt in, and the pot follows the member when he or she changes jobs. It involves simple, low-cost investment options with a lifecycle default, with light administration duties for employers via NAERSA. Employers will process payroll deductions and the authority will do the heavy lifting, including in respect of eligibility, enrolment, collection, investment and compliance.

Crucially, the scheme is fair and flexible. People can opt out after six months or pause later. If they do so, they get their contributions back but the employer and State contributions continue working for them. That is a powerful nudge to stay the course. We know this model works. If we look at the United Kingdom, since auto-enrolment began in 2012, employee pension participation has climbed to approximately eight in ten workers, with fewer than one in ten opting out. Millions who were not saving are now saving, many with an employer match that simply did not exist before. Poland’s pension scheme, PKK, shows similar momentum, especially when it comes to periodic re-enrolment. By contrast, Italy’s one-off soft default in 2007 lifted coverage only modestly. The lesson is clear therefore: persistent, well-designed defaults beat one-off nudges.

I welcome the decision to align the start with the tax year and to give SMEs and payroll providers the time to get systems right from the get-go, which will deliver confidence from day one. This is a long-term, forward-thinking reform. It rewards work, shares responsibility between workers, employers and the State and builds household wealth steadily and fairly. If we stick to the plan, keep fees low and communication clear and periodically review adequacy, in ten years’ time, hundreds of thousands more people will face retirement with security, dignity and choice.

See this speech in context