Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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Amendments Nos. 1 to 6, inclusive, 8 to 10, inclusive, 13, 24 to 27, inclusive, and 33 are related and may be discussed together.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 1:

In page 10, between lines 1 and 2, to insert the following: “ “contributing participant” shall be construed in accordance with section 57;”.

These amendments are purely technical in nature. They are standardising the language in the Bill and improving its coherence. They have been identified by the Office of the Parliamentary Counsel and will ensure the Bill will operate as intended when it is enacted. There are no policy matters contained within these amendments, so I would be very grateful if Deputies would support them to improve the coherence of the overall Bill.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 2:

In page 10, to delete line 2 and substitute the following: “ “contribution” means a participant contribution, an employer contribution or a State contribution;”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 3:

In page 10, between lines 4 and 5, to insert the following: “ “employer contribution” means a contribution to which section 59(2) applies;”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 4:

In page 10, between lines 17 and 18, to insert the following: “ “participant contribution” means a contribution to which section 59(1) applies;”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 5:

In page 10, line 23, to delete “section 32.” and substitute “section 32;”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 6:

In page 10, between lines 23 and 24, to insert the following: “ “State contribution” means a contribution to which section 60 applies.”.

Seán Sherlock (Cork East, Labour)
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I move amendment No. 7:

In page 15, line 4, after “Minister,” to insert “having regard to the views of trade unions,”.

On Committee Stage I said I would come back to this issue on the representation of ICTU as one of the relevant organisations to this new entity. The Minister on Committee Stage stated:

When appointing people to the board I must ensure that, collectively, it has the necessary experience relating to the functions and the responsibilities of the authority. Membership of the board is therefore not constituted on the basis of sectoral representation but instead on what that person has to offer to the authority.

I welcome the fact the Minister is including provision in the Bill that the board of the authority will contain a person who has knowledge and experience of matters relating to the interests of employees. As the Minister knows, it is a shortcoming that was raised by the Irish Congress of Trade Unions in its evidence on pre-legislative scrutiny. I do not believe I am misinterpreting the Minister when I say that she was unwilling on Committee Stage to make ICTU a nominating body and that she wanted to emphasise the skills of candidates and everything they would have to offer in offering those skills. However, candidates put forward by a nominating body must meet specific and detailed criteria determined by the Minister and the appointment of such candidates remains solely and exclusively a matter for the Minister, to ensure the board has an appropriate mix of the experience, knowledge and skills to oversee successfully the performance of the board's functions. Given this safeguard, will the Minister to reconsider the amendment on the basis that ICTU is a default organisation that would have those required skills? It is the foremost organisation at representing workers. Perhaps the Minister would reconsider it on that basis.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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As I said to Deputy Sherlock, the Bill sets out that the board of the national automatic enrolment retirement savings authority, NAERSA, will contain a person who has knowledge or experience in matters relating to the interests of employees. Indeed, that person could well turn out to be a representative of ICTU or someone who would otherwise meet with the approval of trade unionists. However, accepting this amendment would, for balance, require the law also to reflect the need for the Minister to have regard to the views of any number of employer representatives as well. We all know that trade unions and employer representatives have many opportunities to provide the Minister of the day with their views. Therefore I do not believe this provision is necessary and I am not proposing to accept this amendment.

However, it is important to say that the membership of the board of NAERSA is not constituted on the basis of sectoral representation but instead on what that person has to offer the authority, and that is their skill set. As I said earlier, we will want somebody who has experience relating to the interests of employees. It is worth saying that when the Minister of the day appoints somebody to the board, the duties of the members of the board in the performance of their function shall be owed by them to the authority and the authority alone.

When the Minister of the day appoints someone to the board their loyalties must lie with the board and not with any representative group or sector. I have no doubt that somebody from the trade union sector would have the necessary skills. When appointing a board member, the Minister of the day must look at a broad skill set to make sure we have all of the different skill sets needed for the board. I do not propose to accept the amendment.

Seán Sherlock (Cork East, Labour)
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I accept that the Minister is not accepting the amendment and I will not delay the House too long on that matter. The Minister's position is very clear. I have found some comfort in her words in respect of the required skill set. There is a tried and tested formula in legislative matters like this where it absolutely affects workers and their livelihoods. There is plenty of precedent, as I have outlined on Committee Stage, for a specific ICTU representative to be appointed to that board, as they have been to previous boards. If the Minister is not accepting the amendment, I ask her to have due regard to the mandate that ICTU has and the recognition that it has in Irish society on issues of this nature going back decades upon decades. I do not need to highlight for the Minister issues like social partnership and so on. The key role that ICTU plays in representing the interests of Irish workers is absolutely paramount to the workings of Irish society as it relates to workers' terms and conditions of employment. Perhaps the Minister would give due consideration to giving a place to a representative of ICTU on that board. I respectfully say to her that anybody who goes on that board, from ICTU or any other organisation, will be instinctively aware of their duties and responsibilities to the board in question. ICTU has a very solid record in that regard as well.

Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
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I do not understand the Department's objection to this because it seems to be a departure from prior policy. Apart from the fact that predecessors of the pension board would have had representatives in this arena, the fiduciary duties and responsibility to board are a red herring. Ultimately, once anyone who is nominated by an appropriate nominating body goes on a board, their responsibilities when they are in that boardroom are to that organisation.

I can give a slightly different example. Regarding the Good Friday Agreement bodies, if Fine Gael, as it is entitled to do, nominates somebody to the board of Foras na Gaeilge or one of the other Good Friday Agreement bodies, they are not required to resign their membership of Fine Gael or anything like that. However, when they are at meetings of Foras na Gaeilge their responsibilities are to that organisation. Similarly, with organisations that nominate to any of the State boards, once the nominee is fulfilling their functions as a member of that board, their responsibility is to that board and not to any other organisation they are a member of. That is long-settled company law in terms of fiduciary duties. There is no question of that anywhere else where relevant organisations have the power to nominate to a body. There is no question of them being delegates on behalf the nominating organisation. That has never been the case.

It is about ensuring that the person is appointed not only for their expertise but also to bring the perspective of that particular element of Irish life, in this instance workers' rights and the trade union movement. ICTU is not any run-of-the-mill organisation. It is an organisation that is recognised in many pieces of legislation both as a nominating body or an appropriate party in negotiation and different elements like that. Indeed, it is also a nominating body for one of the Houses of the Oireachtas. This is not just any random organisation. This is a well-established organisation that has a certain status in Irish life, a certain authority and a certain legitimate claim to be the key body that represents the interests of workers' rights in Ireland. I have raised concerns about the legislation, that if these funds are not managed correctly, workers could be left out of pocket. It is important that voice is recognised and has status. Who better to do that than the nominee put forward by the Irish Congress of Trade Unions?

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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One of the most important skills anybody on this board would have is financial skills and the ability to make good judgment when investments are being are being considered. I absolutely recognise the mandate and the key role ICTU has in representing workers. I do not want to tie the hands of any future Minister. If an application is made through the PAS, I have no doubt the Minister of the day will give it due consideration to it and that a member of ICTU could contribute in the same way as others whose names are put forward. For that reason, I cannot accept the amendment. If I did, I would end up widening it out and then I would have a plethora of representative organisations looking to sit on this board. I would then be afraid we would have nobody with the right skill set. I am very conscious that this is workers' money.

Many of the AE participants will not be a member of any trade union. In fairness, workers who are part of a trade union are probably fortunate enough to have a pension whereas those not in a trade union are probably not in that position and do not have that pension at the minute. I hope the Deputies understand the point I am making here.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 8:

In page 25, line 21, to delete “Authority” and substitute “Board”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 9:

In page 28, line 18, to delete “the services of any service provider” and substitute “persons to provide services, other than investment management services,”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 10:

In page 28, line 34, to delete “engaged under this section”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 11:

In page 35, lines 3 to 6, to delete all words from and including “The” in line 3 down to and including line 6 and substitute the following: “The Authority shall publish on a website maintained by or on behalf of the Authority—

(a) aggregate statistical data relating to participation in the automatic enrolment retirement savings system,

(b) statistical data relating to the types of investments held by AE provider schemes,

and

(c) such other statistical information as may be prescribed.”.

This amendment was sought by Deputy Ó Cathasaigh on Committee State. I referred it to the OPC to consider how it might be accommodated within the Bill. The amendment brings transparency to the types of investment held by the authority. To reflect the policy, the amendment inserts a new subsection (b) which requires NAERSA to produce statistical data on the types of investments held by the investment management providers. While NAERSA will be mandated to act in the best interests of participants in its reporting obligations, it will be obliged to operate with full transparency in terms of the investments it is making on behalf of contributing workers. I ask Deputies to support the amendment.

Marc Ó Cathasaigh (Waterford, Green Party)
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The first thing to say is that the Minister is as good as her word. She promised to take four of my amendments back to the Office of the Parliamentary Counsel. They have returned to the House this evening as three amendments but all four are captured. I thank the Minister for that. It is unusual and rewarding as a Government backbencher when a Minister engages constructively with the amendments and we find them making their way through into the final law, I hope, presuming that we pass them here this evening.

The Minister will know that my greater overall objective in this Act was about where we invest money and that we should not invest it in fossil fuels or cluster munitions. This came as a recommendation of our pre-legislative scrutiny report on this Bill. I understand the over-and-back that we have had on it. From my point of view, the battle is lost, but my colleagues in the Seanad may take up cudgels on the issue again. The Minister can look forward to that at her leisure. To return to this specific amendment, it is small but I think it is quite impactful. Whether we put in prohibitions at some point in the future for investments of the auto-enrolment scheme in things like fossil fuels and munitions, at least by dint of this amendment we will be able to see where the money is invested.

I understand it is only a portion of what will be contributed to these pension pots but I have always strongly felt that any Government investment should come with the values of this State attached. We have seen the values of the State in spotlight today with our recognition of the state of Palestine. It is not just in words that we want to embody that but in the actions of the State around things like investment. Putting your money where your mouth is a phrase we often hear. This is a case of trying to do that or to ensure that we do not put our money where our mouth says we should not go. However, that is tangential to the point. I am very happy to see that this amendment has made it through the process. Having that statistical data relating to types of investments held by auto-enrolment provider schemes will give us better oversight of Government money. We will see in the future if it is an issue. It may be that the statistical data is published and we can say that we can absolutely stand over that as a State and that we are quite happy with those investments and where they are, or it may come to pass five, ten or 15 years from now that we identify a problem and we say a balance has to be struck between the individual return on investment and the common good, which is what I am most concerned about if we are investing money in the wrong way.

As I said, I thank the Minister for taking this amendment on board. She is as good as her word. I think this amendment improves the Bill and I am delighted to see it as a ministerial amendment.

Seán Sherlock (Cork East, Labour)
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I looked at the amendment. Forgive me if I am being a little pedantic. It is just to seek clarity. It states, "aggregate statistical data relating to participation in the automatic enrolment retirement savings system". That is fine and self-evident. It also states, "statistical data relating to the types of investments held by AE provider schemes". To me, that reads like you can have statistical data about the types of investment, that is, the categories of investment. If you invested in Nestlé, for instance, the category is confectionary and food, but you might not necessarily name the company in which you hold the investment. Does this amendment include a provision whereby the Minister will notify the public as to exactly where investments are made, including identification of the company, the financial institution or wherever it is? If we are talking about ethics, ethical investments and moving away from arms and fossil fuels, there are many corporates in which funds like this might invest which have activities such as mining palm oil in certain parts of the globe or adding to desertification as part of their remit.

How transparent does the amendment intend to be? How far will it go in being transparent with the public about what it seeks to do? The Minister can talk about categories of investments. That is all well and good if it is categorised into food, financial services or industries such as aeronautical or automotive, but if it is not telling you the companies in which investment is being made, it does not amount to a hill of beans.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The website will clearly state where the investments are made. We do not want to lose the point here. This is not State funding or State money. This is the money of the members and they have a right to know where it is going. For that reason, we are going to make sure that NAERSA produces data on the types of investment held by the investment management providers. It will ensure that NAERSA will be required to publish the data and report on where the funds of participants are invested on their behalf. The amendment will facilitate transparency about the types of funds that NAERSA will invest participants' money in. This should help to ensure that the money invested by NAERSA accords with the principles for investing as set out in Part 4 of the Bill, including those related to the environmental, social and governance, or ESG, obligations provided for there. As I said, the website that will be part of this will give greater detail on that. I think that will probably clarify the matter.

Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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Amendments Nos. 12, 23, 30 to 32, inclusive, 34 and 35 are related and may be discussed together.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 12:

In page 35, line 37, to delete “the website” and substitute “a website maintained by or on behalf”.

This group of amendments has been identified by the Office of the Parliamentary Counsel and are once again primarily of a technical nature. In the main, they relate to standardising the wording associated with how NAERSA will specify and publish various operational processes on a website. They will also clarify that the website can be maintained either by itself or by a service provider contracted by the authority for the performance of the functions set out in the Bill. They are technical. They standardise the language in the Bill and improve its coherence. They have been identified by the Office of the Parliamentary Counsel and will ensure that the Bill will operate as intended when enacted. I ask the Deputies to support it, please.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 13:

In page 38, to delete line 30.

Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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Amendments Nos. 14 to 21, inclusive, and 36 to 38, inclusive, are related and may be discussed together.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 14:

In page 41, line 8, to delete “or qualifying trust RAC” and substitute “, qualifying trust RAC or qualifying PEPP”.

This group of amendments is essentially technical. It puts PEPPs, which are the pan-European personal pension funds, alongside other existing pension products that are available and regulated in Ireland and are relevant to this Bill. Doing so means that workers who already have pension coverage will not be pulled into auto-enrolment. This is relevant to matters such as eligibility, future standard-setting, opting in and internal reviews, among other things. We are just including the PEPPs, so I ask Deputies to support this, please.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 15:

In page 41, line 17, to delete “or qualifying trust RAC” and substitute “, qualifying trust RAC or qualifying PEPP”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 16:

In page 41, between lines 34 and 35, to insert the following: “(7) For the purpose of this section, a “qualifying PEPP” means—

(a) if standards in relation to PEPPs apply for the purposes of this section under regulations made under section 52, a PEPP which meets those standards, or

(b) in any other case, any PEPP.”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 17:

In page 41, line 36, to delete “the Pensions Act 1990.” and substitute “the Pensions Act 1990, and “PEPP” has the same meaning as in Regulation (EU) No. 2019/1238 of the European Parliament and Council of 20 June 2019.”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 18:

In page 42, line 3, to delete “and”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 19:

In page 42, line 4, to delete “RACs.” and substitute “RACs, and”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 20:

In page 42, between lines 4 and 5, to insert the following: “(d) standards to apply for the purposes of section 51 in relation to PEPPs.”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 21:

In page 42, line 12, to delete “or qualifying trust RAC” and substitute “, qualifying trust RAC or qualifying PEPP”.

Seán Sherlock (Cork East, Labour)
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I move amendment No. 22:

In page 42, line 22, to delete “years 7 to 9” and substitute “years 4 to 6”.

I will be brief, as I do not want to spend too much time going over a Committee Stage argument, but I read the Minister's reply to that debate. I will quote from it. She stated:

In any event the employer and employee contribution rates will only increase from 3% to 4.5% in year 7, whereas contribution rates in employment-based schemes are generally at the 5% level for both employers and employees. The issue will not kick in until the AE levels are at a higher level. There is going to be a huge amount of work in defining the standards. It is not just a matter of looking at the contribution rate.

She also stated:

There is a good bit of stuff here. We looked at it and felt that at the end of year 6, at the latest, and we could do it sooner – I am happy that we could look at it sooner – but at the end of year 6 at the latest is the best time to do it because the contributions will have ramped up at that stage.

I accept this position in the main, but the Minister and her officials will have read with interest a recent front page article in the business section of a national newspaper under the headline, "Companies looking to sidestep auto-enrolment by using existing pension schemes". That was The Irish Times on 10 May. We should not be naive. There will be employers looking to avoid auto-enrolment in ways that may or may not fulfil the requirements of this Bill and may or may not be as favourable to employees. We acknowledge that the authority will need time to draw up and apply standards to occupational and private pension contributions for exempt employments because it is not as simple as comparing like with like, but how does allowing up to seven years to define standards meet the Government's overarching policy objective of auto-enrolment, which is about improving the adequacy of pensions and incomes at retirement? This is where we take issue. Will the Minister expand again on how she and her officials arrived at the decision that up to the end of year 6 is needed for the work required to define the standards? Was the Pensions Authority consulted, what was its expert opinion on the matter and will the Minister make that opinion available to us?

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I acknowledge that Deputy Sherlock only has the best of intentions with amendment No. 22, but I am afraid that, as on Committee Stage, I am unable to accept it. While this amendment might seem like a straightforward proposal and I accept the Deputy's bona fides in tabling it, a range of complexities mean it will require time to determine the appropriate standards that should apply in respect of employments that will be exempt from the requirement to make AE contributions. As the Deputy will be aware, the Bill sets out that the Pensions Authority will assist the new authority in this work over the coming years, so the Pensions Authority will be involved. It is happy to work with us.

There are a number of relevant issues. First, the standards that need to be set will not only be about the contribution levels into an alternative pension scheme as compared to the contribution levels into the AE scheme. The Bill sets out clear instructions when it comes to contribution levels: they are always to be based on gross earnings; they are always to be matched by the employers; and they are always to be topped up by the State. The net amount going into a person's pot through AE will be transparent and easy to calculate. In contrast, contributions into other pension schemes can start from a base other than gross earnings. Sometimes, employers contribute. Sometimes, they do not. The tax relief applicable also plays a role. As such, to try to compare the net amount going into a person's pension pot from AE versus a different pension scheme is a bit like comparing apples and oranges.

Second, there are issues relating to supplementary benefits, which are provided by some pension schemes but may not be provided by AE or may not be provided in the same way, for example, spousal benefits. The value of these benefits to the individual compared with what AE has to offer will depend on that person's personal circumstances and earnings.

Third, there are a range of technical issues relating to the reporting of data to the new authority. These will need to be determined with the assistance of the Revenue Commissioners and the Pensions Authority. They will require technical systems to be developed to ensure that they operate as intended.

It is for these reasons that I cannot accept the Deputy's amendment.

Seán Sherlock (Cork East, Labour)
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I accept that the Minister is not minded to agree the Labour Party amendment. I am going over old ground from Committee Stage here, but in economic terms, our worry is what is called the opportunity cost. In essence, the time it will take to set this up means that workers will miss out on the scheme's benefits for a number of years. The example I cited on Committee Stage was of a worker on an average income of €922 gross per week. That worker will miss out on an employer contribution of approximately €6,500 towards his or her secure retirement. This legislation is about ensuring that the workers of today will have adequate provision in their retirement years. What we are seeking to do is a wonderful thing, but if we can make it that bit better and do it quickly, then more workers will ultimately benefit. That is inherently the argument I am making in the amendment. However, I have made my argument and the Minister will not accept my amendment. So be it.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I have outlined to the Deputy the reasons I cannot accept it. I have worked with the Deputy many times. Having good ideas and trying to accommodate them has nothing to do with the colour of the party, and I believe that is accepted by the Deputy. If there is a good idea that will benefit people and I can take it on board, then I will certainly give it consideration, but in this case, leaving the Bill as is means the standards will be worked out and set by the end of year 6 at the latest. I give the Deputy the commitment that, if we can do so sooner, then we will, but I do not want to promise something that will not happen. Year 7 is not that far away. At that stage, the employer and employee contribution rates should be moving from 3% to 4.5%. The latter is closer to most employment-based schemes, which are generally around 5% for employers and employees.

Employers will not have the power to compel people to join voluntary schemes if automatic enrolment is better for employees.

As the Deputy said, what all of us are trying to do is provide a pension scheme for the 800,000 people who do not have pensions. I cannot accept the amendment.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 23:

In page 47, line 14, to delete “Regulations may prescribe” and substitute “The Authority may specify, and publish on a website maintained by or on behalf of the Authority, requirements as to”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 24:

In page 50, line 22, to delete "Part" and substitute "Act".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 25:

In page 51, line 11, to delete "contract" and substitute "investment management contract between the Authority and that person".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 26:

In page 52, line 2, to delete "and".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 27:

In page 52, line 6, to delete "section." and substitute "section, and".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 28:

In page 52, between lines 6 and 7, to insert the following:

"(d) without prejudice to paragraph (c), the extent to which a scale and methodology, and custom and practice, referred to in that paragraph take into account climate-related risks.".

This amendment comes about in response to an amendment tabled by Deputy Ó Cathasaigh on Committee Stage. I stated at the time that I was amenable to considering the matter and bringing it to the OPC to see how it could be provided for. As I recall, there were four amendments from the Deputy that I undertook to respond to on Report Stage. I am doing that today.

This amendment inserts into the Bill a new provision on the regulations that the Minister for Social Protection may make. In the context of how the investment services will be provided by procured investment managers, it will be described in terms of risk level and scale. What was missing from the Bill was the idea that the regulation should take into account the concept of climate-related risks. As I understand it, there is custom and practice emerging on how this ought to be taken into account when developing an investment strategy and I am happy to provide for it in the Bill.

Marc Ó Cathasaigh (Waterford, Green Party)
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I thank the Minister for taking what I had proposed to the OPC and coming back with an amendment. Of course, I had originally two individual amendments on this but the OPC found a better place to do it with one amendment.

As the Minister said, it is in section 69, which provides for AE provider schemes and risk levels. I am firmly of the opinion, as the impact of climate change will have in the coming decades begins to dawn on people's consciousness, they will realise that there are investments that are very bad ideas in the medium term. For example, as I stated on Committee Stage, people should not be investing in beach-front properties in the Florida Keys. That has not a great lifetime in terms of potential future investment.

I am glad to see the Minister taking this on board. As she stated, this is becoming more of an established custom and practice. It is unfortunate that we have to look at this in this way, but we know that our climate is changing and that this will have impacts on economies, investments and societies across the globe in the coming decades. I am glad that we are including in legislation that is built to withstand the test of time - I would hope for a 50-year timeframe before this legislation is unpicked substantially - a climate lens and that we are beginning to acknowledge in legislation that the climate is changing, that this will have an impact on our economies and societies and that we had better start laying the foundations for figuring out how we cope with that in the here and now.

I thank the Minister. It is great to see a little bit of work done by the backbenches coming through and into the final shape of the Bill. I thank the Minister for the constructive engagement on it.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 29:

In page 54, line 33, to delete "may" and substitute "shall".

This is another amendment that arises as a result of an amendment that Deputy Ó Cathasaigh put forward on Committee Stage. I said I would see how we could cater for it on Report Stage.

Members should not that the amendment has not been grouped with the previous amendment because that one relates to regulations on the scale and methodology to be used to describe the risk levels of schemes while this amendment instead relates directly to the investment rules applicable to auto-enrolment. The amendment changes the word "may" to "shall". In effect, it means that when an investment manager is investing funds provided by the new authority, he or she must take into account the potential long-term impact of investment decisions on environmental, social and governance factors. The wording of the Bill currently makes that optional and we are moving towards making it obligatory.

I recall that a number of Deputies, including Deputy Sherlock, expressing support for Deputy Ó Cathasaigh's amendment. I am happy to make provision for the matter to which it related in the Bill.

Marc Ó Cathasaigh (Waterford, Green Party)
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From the outside, if you had a look at this amendment, which removes the word "may" and replaces it with the word "shall", even if you did not have a knowledge of the legislative process, you would ask what are those guys doing in there that something like this is what is taking up their time. However, this is probably the most consequential amendment. Certainly, it is the most consequential of the amendments that I have managed to get the Minister to introduce during the debates on this Bill.

Section 74(2) contains seven provisions. In six of those provisions, the word "shall" is used. The provision to which the amendment relates states:

... in accordance with the prudent person rule referred to in subsection (1)(a), may take into account the potential long-term impact of investment decisions on environmental, social and governance factors ...

The language there is weak. It opens up the possibility of the provision being ignored. This small change in language will have a big impact in terms of absolutely stitching in to the fabric of this Bill the fact that these investment decisions will have to have due regard to ESG concerns. That will change significantly how investments are made on behalf of people who are enrolled by means of the auto-enrolment scheme.

I thank the Minister for her constructive engagement on this matter. Even though it is the smallest amendment on paper, it is the most consequential of the three that I have had accepted.

Seán Sherlock (Cork East, Labour)
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There was much deliberation in relation to the words "may" and "shall". There is a doctorate in me somewhere after I leave this place on the use of those two words in legislation and on their import.

I acknowledge Deputy Ó Cathasaigh's work on this. I also acknowledge that the Minister has ceded ground, if I may say that, to her Government colleague in the context of the importance of the amendment. From an Opposition point of view, I acknowledge a good day's work on the part of Government in respect of ensuring that ESG goals are adhered to.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 30:

In page 58, line 6, to delete "and published by the Authority" and substitute "by the Authority and published by it on a website maintained by or on behalf of the Authority".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 31:

In page 59, line 23, to delete "and publish" and substitute ", and publish on a website maintained by or on behalf of the Authority,".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 32:

In page 59, line 36, to delete "and publish" and substitute ", and publish on a website maintained by or on behalf of the Authority,".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 33:

In page 68, line 20, to delete “which”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 34:

In page 68, line 23, to delete "and publish" and substitute ", and publish on a website maintained by or on behalf of the Authority,".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 35:

In page 69, line 9, to delete "and publish" and substitute ", and publish on a website maintained by or on behalf of the Authority, requirements as to".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 36:

In page 75, line 5, to delete “or”.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 37:

In page 75, to delete line 8 and substitute "RAC, or".

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I move amendment No. 38:

In page 75, between lines 8 and 9, to insert the following:

"(iv) a PEPP (within the meaning of section 51) in relation to which the applicant is a contributor or the employer of contributors is a qualifying PEPP;".

Seán Sherlock (Cork East, Labour)
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I move amendment No. 39:

In page 88, between lines 17 and 18, to insert the following: “Hindering the displacement of occupational pension schemes

129. An employer shall not wind up or freeze a qualifying occupational pension scheme in place after the commencement of this Act for a period of 10 years.”.

In order that I am ad idem with the Leas-Cheann Comhairle, this amendment relates to the issue of hindering the displacement of occupational schemes. It is a repeat of the Committee Stage amendment. In essence, we are saying that we all support the move to auto-enrolment. That is self-evident. We recognise that the current voluntary approach to pension savings has failed. In putting forward the amendment, we want to seek to prevent employers from winding up or freezing a good workplace pension scheme for the duration of the roll-out of auto-enrolment. We want to ensure there is no displacement of pre-existing pension schemes.

I will again quote the Minister's response when she did not accept the amendment on Committee Stage. She expressed empathy for the position but stated:

However, the proposed amendment cannot be incorporated into the AE Bill at this time as it is subject to ongoing legal advice. The preliminary legal opinion suggests that such a provision would be unconstitutional with regard to infringing the property rights on the right to earn a livelihood of employers.

From my contact with the Irish Congress of Trade Unions, which has long been a vocal champion of auto-enrolment, it is calling for firewall provisions to protect against employers responding to the cheaper pension auto-enrolment option by closing down good workplace pensions. That is essentially what the amendment is about. We just want to put a firewall in place to ensure that there is no diminution of those pre-existing pensions.

On Committee Stage, the Minister told us the proposed amendment could not be incorporated into the Bill at that time because it was subject to ongoing legal advice. I withdrew the amendment with a view to the Minister expanding on the legal advice. I now seek some expansion on that legal advice for the record of the House. It would be very informative for me as the proposer of the amendment and for the wider community of people watching in who have a very particular interest in this, especially the Irish Congress of Trade Unions.

Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
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I support all that Deputy Sherlock said. It is vitally important we ensure no room for manoeuvre exists for people who will look to exploit the system, or will look to not give some categories of workers their full entitlements, and that we work to avoid that. The points were well made. I welcome Deputy Ó Cathasaigh's amendments and commend him on them. I also commend the Minister on taking them on board. It shows that, sometimes, when we go back to the Office of the Parliamentary Counsel, more things are possible. That also includes the Seanad. It is to be hoped some of these points can be taken on board in that context.

I take the opportunity to put on record, and we are approaching a final vote shortly after this amendment, that our position is clear. We support the principle of auto-enrolment but we have serious concerns about the scope being given to private pension providers in this regard, rather than the National Pensions Reserve Fund. We tabled amendments on Committee Stage but, unfortunately, they were ruled out of order. We are considering how we might bring forward amendments for the next Stage in the Seanad that might be in order. Due to the challenges of the charge to the Exchequer that is somewhat difficult, but we will make every endeavour to bring those amendments. I hope the Minister will consider the point at that stage.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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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.

Seán Sherlock (Cork East, Labour)
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The Minister has not advanced her position since Committee Stage. I accept that. We are now in the arena where the Minister has to take a position on what is in the preliminary legal advice. I appreciate that. However, there are other channels of communication, through her departmental officials and stakeholders out there in the ether who are very interested in this legislation, whereupon some perspectives may be shared on that very same preliminary legal advice. I am sure plenty of channels are open. It will be another while yet before this legislation will be concluded. I anticipate, and say this absolutely respectfully, that the line the Minister took on Committee Stage and is taking now will be the same line that will be repeated when the Bill is taken in the Seanad. I do not say that in any cynical way. I am just being straight and blunt about that. It would be very useful to have some insight into the legal advice.

I reiterate that what we are trying to do is create the firewall provision. I made the case on Committee Stage that we do not have an auto-enrolment scheme up and running. We can take on board perspectives from the UK, but I am not sure that is a suitable evidence base because it is a different country and a different set of circumstances. Although the UK is quite related culturally and so on, it is not Ireland. The stronger the primary legislation is in protecting against a diminution of existing pension schemes, the better it will ultimately be for workers.

That is the simple case I am making here.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I expect to have the legal advice by the time the Bill goes to the Seanad. On a second point, it is not just the UK. There was a similar increase in the take-up of occupational pensions in New Zealand and Australia. I expect that will be the case here.

Seán Sherlock (Cork East, Labour)
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I thank the Irish Congress of Trade Unions, from which I have taken a very direct line. That will be obvious to everyone who has been watching the amendments we have put forward. That is only natural because I am a member of the Labour Party. This is good legislation. I would like to have seen it improved, but it is good for workers. If I may say so, the Minister has done a very good day's work here, as have her officials, in promulgating this legislation. It could be transformative as regards the very simple concept and ideal of ensuring that people have enough to put bread on the table when they reach their retirement years. It is about ensuring the security blanket of having an income when you reach the autumn and winter years of your life. That is a very good thing for any society to seek to achieve.

Marc Ó Cathasaigh (Waterford, Green Party)
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Deputy Sherlock made reference to a good day's work. More than a good day's work was put into this. The Cathaoirleach of the committee cannot be here today but Deputy Ó Laoghaire and I are so, on behalf of the committee, I am thankful for all of the support at the pre-legislative scrutiny stage. We might have liked to see more of the recommendations being taken on board in the final shape of the Bill, but we found the Minister and the Department very willing to come to us at all times.

This legislation is substantial. The members of the committee took a good chunk of time to deepen our understanding of the issue and the implications of the legislation. On Committee Stage, we were joking that it is unlikely that those who will benefit from this legislation will still have the option of voting for any of us when they reach pension age. It is legislation that will benefit people 20, 30 or 40 years from now. However, it is a good day's work in the political sphere even though it took far longer than that for the Bill to get here. I congratulate the Minister and her officials on all of the work that has gone into this.

Jennifer Murnane O'Connor (Carlow-Kilkenny, Fianna Fail)
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I thank the Minister and her team. I am not on the committee but I thank the members and everyone involved. This is an exceptional Bill. It will be crucial from the point of view of employers and employees. The reason I am contributing now is that I have been speaking to employers and employees. I know the Minister will give them what they are asking for, which is proper information and communication, some kind of public awareness campaign and for everybody to work together. We always talk about red tape and who can opt in or opt out. That is fine. The Minister has explained all of that. However, our role is now to communicate this to businesses, employers, employees and everyone involved. We must get that right. This is a really good Bill. I again congratulate the Minister on it, but it needs to be communicated properly. Information needs to be absolutely correct and accurate so that people will have the choice to opt in or opt out.

Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein)
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I have said my piece on the legislation in general. I commend the work that has gone into it. The whole area of auto-enrolment is vitally important. We have significant reservations about the management of the funds. That will be discussed further in the Seanad, but I recognise the work that has gone into the Bill. In principle, auto-enrolment is certainly a big piece of the jigsaw. As I have said, further discussion is required but we welcome the fact that the policy objective is being advanced, even if we do not necessarily agree with the methodology.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I thank the Deputies for their co-operation and support. This is transformational legislation. It will affect many of the workers of tomorrow and of today. I was speaking to a group of schoolchildren this morning. They were 16 and 17. It will impact on their lives down the road. It will also impact future generations. It took 25 years to get this far, so I compliment everyone on helping me to get it to this point. I particularly thank my officials because this was a massive piece of work. It is a very long Bill. There is a great deal going on behind the scenes as we speak. I really thank those involved and the joint committee, which put a lot of work into its deliberations. We were able to take on board most of the recommendations. There were a couple we could not accept but we took many on board.

In response to Deputy Murnane O'Connor, we have a communications strategy ready to go for when the legislation is passed. There is a budget to accompany that because the most important thing is that people understand it. The Bill is complex but, simply put, it is about saving a little now for when you retire. When you get close to retirement, you will be damn glad that you have that pot ready because, even though the State pension is and will remain the bedrock of our pensions system, it is a big drop in income for some people. They go from working full-time to drawing that State pension and this measure will bridge that gap.

I thank everybody for their co-operation and for the amendments they brought forward. While I could not accept them all, discussing them gave us an opportunity to tease matters out further.

Catherine Connolly (Galway West, Independent)
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The Bill will now be sent to the Seanad.