Eoin Hayes (Dublin Bay South, Social Democrats)
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74. To ask the Minister for Employment Affairs and Social Protection when his Department will establish, and make publicly available, the administration fees and charges being imposed as a part of auto-enrolment; and if he will make a statement on the matter. [62261/25]

Eoin Hayes (Dublin Bay South, Social Democrats)
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My question is about administration fees and charges being imposed as part of auto-enrolment. My understanding is that these fees have not been agreed or released publicly. I have some reservations more widely about whether it is still the case today that the Department and Government are sufficiently prepared when this scheme goes live, which is just a few short weeks away, as the Minister said yesterday.

Dara Calleary (Mayo, Fianna Fail)
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I thank the Deputy. I take this opportunity to wish him well. I look forward to working with him. This is his first time attending parliamentary questions as his party's spokesperson for social protection.

We will introduce automatic enrolment, My Future Fund, from 1 January 2026.

The aim is to address the pension coverage gap that exists in our country and to provide workers with greater comfort and security regarding their retirement income.

There will be two separate fee elements.  First, there will be an administration fee, which will cover the collection of contributions, the allocation to the investment plans and the provision of account management services.  Second, there will be a separate fee for investment management services. The administration fees associated with automatic enrolment are under active consideration as we speak and will be finalised following consultation with the new chief executive of the National Auto-Enrolment Retirement Savings Authority, NAERSA, and the Minister for Public Expenditure, Infrastructure, Public Services Reform and Digitalisation. I have written to the Minister this week in relation to this issue.

As previously announced, the administration fee will take the form of a flat weekly fee rather than a commission based on a percentage of funds under management.  In this way, the administration fee will reflect the actual costs of administration, which do not vary with fund size. They will be the same for all participants regardless of their income or the size of their retirement fund and will, ultimately, provide much better value for money for the participant over the course of a standard retirement planning horizon.

In addition to administration fees, there will be some fees for investment management services.  These services have been procured through a competitive procurement process conducted under EU rules. That tendering process required fees to be less than 0.1% of assets under management.  In this regard, I can confirm that the prices attached to the bids were significantly below the maximum ceiling and represent very good value for participants.

I am committed to ensuring that the fees in My Future Fund are kept low and that they are transparent, accessible and understandable, especially as the prospective participants in the system will be lower- and medium-income earners.

Eoin Hayes (Dublin Bay South, Social Democrats)
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I thank the Minister. I very much hope the fees will be under 0.1% of assets under management. It would be extremely concerning if they were anywhere near that. My understanding from the Minister’s answer is that the fees have not been detailed, and this goes to the heart of the question of whether the State is adequately prepared to introduce auto-enrolment on 1 January as the Minister said today he would be doing.

As it stands, about €100 billion of pensions are in private occupational pension schemes. The Minister is planning on the State mandating a significant increase to that without there being any clarity on the fees for those affected. Importantly, in the UK, about 75% of the accounts of the national employment savings trust, NEST, scheme are dormant. If these fees are charged on the dormant accounts, it will compound the reduction of the contributions the individuals have made. It would be very concerning if this were to be the case here as well. If the My Future Fund mirrors what is happening with the NEST fund, it would create a huge problem for individuals. The fund in the UK currently has a deficit of £1 billion and we have lower economies of scale here. Does the Minister have any comparison with the UK experience and does he understand whether the fees will be applied to the dormant accounts?

Dara Calleary (Mayo, Fianna Fail)
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Ireland is the last country in the OECD to introduce auto-enrolment. This is not a good thing. The only good thing about it is we can learn from other products and countries and look at what we need to change here to make sure we do not end up with their problems. We have looked closely at NEST, given its proximity to us. We will observe it and ensure, through NAERSA, which will be independent of the Department and the Minister of the day, that it keeps us relevant. Most importantly, it is necessary to ensure it is as efficient and as accessible as possible.

It is not the State's money but each individual’s money. It is money belonging to each of the 750,000 people who are a part of this scheme. They will have access to information through the My Future Fund app online to see where their money is going and its investment. They will also have the choice to make whatever investment suits their stage in life, be that high-risk, medium-risk for low-risk investment. Through all that, we will ensure the fees associated with this are understood and transparent. Many people do not have that accessibility or availability in existing pension arrangements.

Eoin Hayes (Dublin Bay South, Social Democrats)
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That goes to the heart of the question here, which is around the digital literacy of the individuals we are putting into this scheme. I am very concerned there is no plan for what we are going to guide people with in terms of the lump sum they will get at the end of the scheme. For those people in their 50s or 60s approaching retirement age who will get that lump sum, there seems to be no pathway to how they would account for the pension provision or ensure they are not taking risky decisions or making inappropriate use of those funds.

There is also a question around the overall structure of the fund and I want to keep an eye on that over the course of its implementation. I completely accept the NTMA could not handle 750,000 individuated pension scheme accounts. There is a question, however, around the pooling of risk. How will it be possible to ensure those 750,000 individuated accounts would be treated as a larger pension scheme guided by the State so it will be possible to ensure there will be lower volatility for investment returns for those individuals and the pension provision is secure for the future?

Dara Calleary (Mayo, Fianna Fail)
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That is exactly why we have established the structure of NAERSA, which is independent of the Department, with a very successful and experienced team of staff that we are building up now. It has an independent board that represents the interests of workers, employers and the public. Those kinds of operational decisions will be made by NAERSA. In relation to people exiting the scheme, it will be some years before that happens. NAERSA will take full operational control of the scheme and be able to provide that level of information. My focus now is getting it up and running. It is about trying to get an understanding that this is happening and this is why we have information resources available on gov.ie/autoenrolment.

I share the Deputy’s concerns and I will be discussing these NAERSA, including around digital literacy and ensuring that people who do have digital challenges and do not have that access to digital will be able access their information. This is something I try to do right across the Department. The establishment of an independent authority separate from the Government is in the best interests of those 750,000 people to make the best possible return for their future. I am confident it will make those decisions in the best interest of the citizens.