Eoin Hayes (Dublin Bay South, Social Democrats)
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I move amendment No. 1:

In page 11, between lines 11 and 12, to insert the following:

“(a) in section 10(2), by the insertion of the following paragraph after paragraph (b):

“(c) act with fiduciary responsibility to the participants in the scheme in the discharge of its functions.”,”.

This amendment follows on from our discussion on Committee Stage regarding board composition and the responsibilities and profiles of members who are still on the board of the national auto-enrolment scheme authority. The Minister said on Committee Stage that members who have recently been appointed to the board are very capable individuals and will serve with distinction. I agree wholeheartedly with that. I do not doubt the credentials of anyone who has been appointed or, indeed, their ability to fulfil the functions as set out in the primary legislation for auto-enrolment.

My contention on Committee Stage was that we ought to have a more direct relationship between the kind of representation at board level, the participants who have a financial interest in the performance of the My Future Fund and auto-enrolment scheme and the people who sit on the board. I accept that there is an individual on the board who will have knowledge of the interests of workers. While I wanted the representative aspect of such an appointment to be stronger and more direct in terms of appointing an additional person enrolled in the scheme, if the board is to be composed as is, it crucial that we set out very clearly what the responsibility of those members will be to the participants.

As the Minister said in this House on 13 November, the funds entrusted to the My Future Fund will be those of the participants, namely the employees as opposed to the employers or the State. As the Minister stated on that date, "It is not the State's money but each individual's money". I think it prudent that responsibility for managing the money of the participants be made explicitly clear in legislation. That is why my amendment focuses on how the responsibilities of the board to participants in the scheme are elucidated in the Act, and establishing a clear and uncontestable fiduciary responsibility on the board members to act at all times in the interests of participants.

Of course, it can be argued that the code of practice for the membership of State boards contains sufficient guidance on the responsibilities for board members, which I assume all members will be subject to. Clarity on that would be very welcome. The code, however, is not referenced in the Bill, which maintains only that fiduciary obligations exist between board members and State bodies. It does not refer to board members having direct responsibility for the management of funds that belong to individuals. This is a first. On Committee Stage, the Minister was keen to stress that it is the individual participant's money. There is a need here for an added layer of fiduciary responsibility on board members which reflects that fact.

I spoke, on Committee Stage, about the potential to structure this scheme around alternative, non-individuated pension vehicles.

Given that the current structures are being progressed, and the Minister's insistence on the funds remaining those of individual participants, I am arguing we need an extra measure so that the board members understand the very weighty responsibilities contained in the nature of the work they are carrying out, which involves being entrusted with the financial health of millions of people's final years, and that their fiduciary duties are to those people as individuals and not to an aggregated, risk-assessed group, financial strategy or the financial health of a body corporate or State body. That is a first, as I said. As such, it is appropriate that such responsibilities be properly accounted for in the primary legislation.

This gets to a broader point about the preparedness of the Government and of the structures put in place for the launch in just a few short weeks. I would argue we need clarity here about fiduciary responsibility but also more broadly about the board's other responsibilities. We still have not heard about the administration or management fees that we asked about in the Chamber last month. Will this be a board responsibility too, and when will we hear about it? Will it be the board's responsibility to ensure the integrity of the scheme if employers divert employees to less beneficial schemes for them? Will it be the responsibility of the board to provide financial literacy training to participants? Will it be the board's responsibility to craft annuity schemes for participants to purchase with their lump sums? All of these issues lack sufficient clarity. They have been raised with the Minister and were flagged with the Business Committee last month for further discussion in this House. We still do not have clarity on any of them. It appears to me right now that the Minister is not prepared for the launch date on 1 January. This amendment goes some way towards ensuring the board is not as unprepared as he seems to be. I commend it to the House.

Dara Calleary (Mayo, Fianna Fail)
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Gabhaim buíochas leis na Teachtaí as na leasuithe agus as an seans an Bille tábhachtach seo a phlé. I gcomhthéacs na leasaithe ón Teachta Hayes, ní bheidh mé ag glacadh leis an leasú seo. I will not be accepting the amendment. I absolutely reject the Deputy's assertion that we are not prepared for the launch of My Future Fund.

In respect of the amendment, section 10 of the auto-enrolment Act relates to the establishment of the board of the National Automatic Enrolment Retirement Savings Authority, NAERSA. Section 10(2) charges the board with ring-fenced responsibilities that relate specifically to its oversight role in the overall management of NAERSA and the automatic enrolment system. This includes arrangements relating to the delivery of the statement of strategy, the annual plan and the performance of the chief executive officer. Section 10(2) also requires the board to have oversight of the performance of NAERSA's functions, which are set out in section 9 of the Act. Section 9(2) of the auto-enrolment Act mandates NAERSA to perform its function in a manner that operates in the best interests of the participants, which provides for the management of participants' retirement savings with appropriate care and judgment. The intent of this wording is similar to the wording in Deputy Hayes's amendment, in that fiduciary responsibility means acting in the best interests of participants. Moreover, section 11 of the Act provides that the duties of members of the board and the performance of their functions shall be owed by them to the authority and the authority alone. Additionally, the investment rules of the scheme, which are set out in section 74 of the Act, require the investment managers to invest participants' contributions in the best long-term interests of the participants. Given that the function of NAERSA includes arranging for the investment of contributions, the board of NAERSA will have an oversight role here in ensuring that the function is performed appropriately. Therefore, the inclusion of wording in section 10 requiring the board of NAERSA to act with fiduciary responsibility to participants is not required, as the intent of this wording is already provided for in this legislation.

In relation to preparedness, as the Deputy knows, this week we have launched the employers' portal of My Future Fund. Employers are signing up as we speak. Next week, we will be launching further details on that and we are continuing an extensive promotional campaign in this space around building people's awareness of My Future Fund. The notion that we are not prepared does not stand up to any fair or appropriate scrutiny.

Eoin Hayes (Dublin Bay South, Social Democrats)
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I am disappointed at that response. I understand the logic the Minister has put forward and I accept that the Department is doing all that it can. However, I have very real concerns that the Department and the Minister are not sufficiently prepared for this launch date. As much as they have done a promotional campaign, there are equally some unscrupulous actors equally promoting themselves to divert employers from investing in this My Future Fund on behalf of employees to other funds. The Minister seems to have done absolutely nothing about it.

More typically, when we think about the investment management role of any organisation that is charged with managing funds on behalf of individuals, it is absolutely imperative that fiduciary responsibility is not implied or intended but is made explicit and is charged specifically to those who have the oversight and the role of ensuring that their funds are being managed appropriately. Saying that the investment managers - private pension funds - are going to do it is ridiculous. You need to have proper oversight and you need to ensure that the board is actually charged explicitly with that role. I am quite disappointed that the Minister does not agree.

Dara Calleary (Mayo, Fianna Fail)
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I would draw the Deputy's attention to section 74 of the Act, which requires the investment managers to invest participants' contributions - the same people we are talking about - in the best long-term interests of the participants. We share the same thing. The function of NAERSA includes arranging for the investment of contributions. The board of NAERSA will have an oversight role in ensuring that this function, as set out in section 74, requires investment managers to invest participants' contributions in the long-term interests of the participants. That is the function. The board has a duty to make sure it is performed appropriately. I have confidence in relation to that.

My apologies, as I meant to update the Deputy. We will be bringing a memo to the Cabinet next week in relation to the fees. That will bring full clarity to the fees and will show the benefits of auto-enrolment and My Future Fund in terms of the number of people to whom we are bringing much lower fees than are available in any other space in this market. In respect of other products, we have drawn attention to that and have done a lot of work on it. We will also be bringing further regulations forward next week. In bringing attention, as has come back in the feedback, we have given many workers the information they needed to highlight this and to see they were being offered a lesser product than My Future Fund.

Eoin Hayes (Dublin Bay South, Social Democrats)
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I thank the Minister. I genuinely welcome the clarity he will bring on the fees in the Cabinet memo next week. I also welcome the work he will be doing in regulating the allocation of funds for employees towards the right products. I would support him in bringing those regulations expeditiously, as reported in the media. I just do not agree that investment managers can be charged with the responsibilities here. This is employees' money. It is a State-mandated fund. The board has a responsibility here. I really do think that the Act is not sufficiently clear or explicit in that. I am quite disappointed that the Minister does not agree.

Dara Calleary (Mayo, Fianna Fail)
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With the permission of the Cathaoirleach Gníomhach, I would like to thank the officials in the Department for their work on this social welfare Bill, in particular the officials who are implementing it as we speak across the country in terms of investing €28.9 billion next year in our social welfare funds. I want to put on record my thanks to every one of those officials both at Department headquarters and across the country who are investing this money as we speak.

Eoin Hayes (Dublin Bay South, Social Democrats)
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Hear, hear.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Cuirfear an Bille chun an tSeanaid anois.