Liam Quaide (Cork East, Social Democrats) | Oireachtas source

I thank the Minister of State, Deputy Grealish, for being here. The Social Democrats' views on the auto-enrolment system have been well articulated by my colleague Deputy Gannon in previous Dáil debates, particularly in April of last year. We very much welcome the concept but have concerns which I will go into in some detail.

Every worker should have access to a retirement income capable of providing them with a decent quality of life as they age. There are many positives to auto-enrolment. Certainly, a greater role for the State in ensuring workers can retire with dignity is inevitable and something we should all embrace.

One aspect of the auto-enrolment scheme which was never sorted out as the legislation passed through the Oireachtas and which I would like to raise again is where the funds from the scheme - which are the public’s money - will be invested. I know that this issue was raised previously and that as the legislation went through the Houses, colleagues proposed amendments which would have restricted the scheme from, for example, investing in fossil fuels or the arms industry, but these were not accepted by the Minister at the time, Heather Humphreys. Those amendments should be reconsidered. Pension funds are among the largest investors in our financial system. They control vast sums of capital. Where they choose to invest has real consequences. By directing money away from polluting industries or companies that ignore workers’ rights, pension funds can exert real pressure and help change corporate behaviour. For many years, there was growing recognition of this responsibility, with pension fund managers adopting ESG principles. However, there is now evidence that some funds are rowing back and are placing less emphasis on conscious investment and more on short-term returns. This is a worrying trend. Given their scale, pension funds should be a force for positive change, not contributors to environmental destruction or poor labour standards.

Quite likely influenced by Trump’s "greed is good, regulation is bad" hypercapitalist mentality, there is growing evidence that some investment and pension fund managers are scaling back their commitments to ESG principles. Certain large US institutions have reduced emphasis on climate commitments and some European pension funds are revising their exclusions to include companies with defence business. In addition, proposals under the EU’s corporate sustainability reporting directive could, if adopted, remove a significant proportion of companies — potentially up to 80% — from mandatory sustainability reporting. Taken together, these developments show we cannot rely solely on the discretion of investment and pension managers to ensure that funds are directed responsibly, avoiding companies that pollute, disregard workers’ rights or are involved in the arms industry. Strong regulatory oversight and clear ethical commitments are essential to protect people and our natural world.

The joint Oireachtas committee on social protection's pre-legislative scrutiny report from 2023 recommended that the forthcoming auto-enrolment retirement savings scheme — dubbed My Future Fund — would prohibit investments in fossil fuels and the arms industry. Additionally, the committee suggested allocating a minimum percentage of funds to Irish renewable energy developments to support the nation's climate action goals. In response, the then Minister, Heather Humphreys, introduced an amendment requiring NAERSA to produce statistical data on the types of investments held by investment management providers. While this amendment aims to enhance transparency, it falls short of the committee's recommendation for explicit investment restrictions. This approach is insufficient. Given the scale of the fund and its potential impact, we need robust safeguards to ensure public money is not invested in companies that contribute to environmental degradation or engage in activities contrary to our ethical standards.

In 2018, Ireland became the first country globally to commit to divesting public funds from fossil fuel companies, marking a significant milestone in our environmental policy. It is imperative that we uphold this commitment and ensure that My Future Fund aligns with our climate and ethical objectives.

I urge the Government to revisit discussions from the passage of the pensions Bill concerning the expansion of the pension scheme to include individuals not initially covered. A particularly significant group to consider is family carers. According to the 2021 census, approximately 300,000 people in Ireland provide unpaid care. This marks a notable increase over the past six years. These carers often face challenges in maintaining consistent employment due to their caregiving responsibilities, leading to gaps in their pension entitlements. This situation disproportionately affects women, who are more likely to take on caregiving roles, thereby aggravating gender inequalities in pension provision.

On Committee Stage of the Automatic Enrolment Retirement Savings System Bill in the Seanad, Senator Higgins tabled an amendment advocating for a report outlining measures to ensure that individuals engaged in care work outside the formal labour market are supported by the new pension system and have equitable access to its entitlements. Although this amendment was not accepted at the time, I urge the Government to reconsider its merits. Addressing this issue is crucial to ensuring that family carers, who play an essential role in our society, are not left financially vulnerable in their later years. I urge the Minister of State to address these aspects of the pension auto-enrolment system, which are clear ethical shortcomings in what is overall a welcome initiative.

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