Marie Sherlock (Labour) | Oireachtas source

I welcome the Minister to the Chamber. I welcome the Bill. I recall that in late 2007, when I was a new official in SIPTU, I met the then Minister, Mary Hanafin, just after the launch of the Green Paper on auto-enrolment. It is sad to think that it has taken 17 years to get to this point, but it is a point we welcome nonetheless. It is important to say that it has been 17 missed years of pension contributions that many workers will not have made, or more than 40% of their working lives.

It is important to say that we have already heard, and will hear over future months, a lot of, as we say at home, clamhsáning or complaining from certain employers and representative groups with regard to the introduction of auto-enrolment. The crucial point to be made is they have had years to prepare for this. In fact, they have got away for years with not having to engage with auto-enrolment because of the delays in the legislative system. That is something employer representative groups must be reminded of when this issue comes up. The Bill is long overdue and absolutely necessary. I am very glad this legislation has now been brought forward. I acknowledge that since the straw man proposal was published in 2018, there have been what I consider to be important improvements to the central processing authority, the filtering of money through that authority, and the capping of management fees, which is an improvement on what we saw in 2018.

In the current context, the large and growing gap in pension coverage in this country means that auto-enrolment has never been more important. The overall figures for pension coverage indicating that just under half of all workers do not have an occupational pension is slightly flattered by the degree to which public sector workers have access to an occupational pension. However, it is important to say that not all public sector workers have that access. I understand approximately 90% of public sector workers have access to an occupational pension so, by definition, 10% do not and are solely reliant on the State pension or a personal pension. When we look at the private sector that rate is about 35%. This is an issue for private sector workers and, in particular, women workers and low-paid workers. The gender pension gap in this country is approximately 35% or probably higher across a number of sectors. While this is an issue mainly for low-paid workers and women workers, it is increasingly becoming an issue for middle-income workers. We see rents eating up so much of people's incomes. We also see that many more people are renting post retirement. The spare capacity to allocate to a personal retirement savings account, PRSA, especially for middle-income workers, is becoming less and less. That opportunity is far less.

I very much welcome auto-enrolment, but I will also record some very serious concerns about what we have before us. The first regards the minimum age of 23. It makes no sense to me. It is out of kilter with the minimum age of 16 for PRSI. It indicates a rather paternalistic view of when people start their "real job" and, crucially, represents wasted years when contributions could have been made.

The second key concern is the earnings threshold of €20,000. There is a wider issue here about what the Government is or is not doing to deal with the low-paid wage trap in this country. I take the view, as do many on the left and in the trade union movement, that in the first instance the changes to PRSI we will see with regard to thresholds, which is of course separate from the pensions issue, will keep low-paid workers trapped in low pay. We see across some sectors employers targeting the lower PRSI threshold for payroll purposes. It is obviously financially better for them to keep workers on less hours and lower pay in order to pay the lower rate of PRSI. The announcement in recent weeks by the Government on PRSI is disappointing because it means those workers will be kept trapped below a certain level of pay. What is contained in the Bill will exacerbate that. We will have certain employers who will keep workers below that €20,000 threshold, or wherever the threshold will be in future, in order to get out of having to pay that employer contribution. I note that there is an opt-in for workers on less than €20,000 but I have to ask - maybe it is in the Bill and I hope it is - for specific employee protections for those workers who want to opt in. On the face of it, if a worker earning below €20,000 goes to his or her employer and asks to be opted in, it can only be imagined how that conversation will play out. There is a very real risk that employees will be very much dissuaded from and intimidated out of opting in.

When so much time has been spent over the past number of years talking about the gender pay gap, it is not credible to continue wringing our hands about that pay gap when we know that a huge part of it is that so many women are trapped in part-time low-paid employment. This issue of the €20,000 threshold will very much affect women workers. I ask the Minister to reflect on the €20,000 threshold. I hear what she says about bringing amendments to the Seanad that will not be policy related, but it is disappointing that the Government has decided against the pre-legislative scrutiny recommendation to get rid of the €20,000 threshold, and will continue with it.

The other key issue is that of opt-outs. A quasi-mandatory system of auto-enrolment is not what we should have. It needs to be mandatory for all workers. There is also a serious concern about self-employed workers and their lack of access to an auto-enrolment scheme. However, there is a particular issue whereby those with a pre-existing PRSA will not be considered for inclusion in the auto-enrolment scheme. A lot of the conversation has been about pension coverage but we also need to talk much more about pension adequacy. While 46% of all workers in this country have occupational or personal pensions, what is in those pensions is often not talked about. In particular, we know that some of the contribution levels of those with a PRSA are extremely low, which points to very real concerns further down the line regarding pension adequacy.I am not sure we have very good data on pension adequacy. I know some research has been undertaken but I would like to hear from the Minister about her conversations with representatives of the Pensions Authority on the exclusion of those who currently have PRSAs and on the seven-year period. The seven-year wait until the Minister will seek to include those on PRSAs is very long. It means wasted years for those on PRSAs and a missed opportunity, in the context of the overall Bill, to get things right now.

The question of what pension adequacy means is important. In this regard, we are aware of certain developments in certain sectors. When I was looking at the labour force survey data today, I noted there has been a collapse in occupational pension coverage in the caring, leisure and recreation occupations over the past three years. We do not really know why but we know there have been changes somewhere and a resulting significant increase in personal pensions. The question going through my mind concerns occupational pensions in the caring, recreation and leisure professions, which are low-paid. If employees in these professions now have personal pensions or PRSAs, how much are they actually putting in? There is a genuine need to drill into who currently has a PRSA, how much they are currently contributing and whether we are in any way satisfied they have coverage.

The final issue I want to raise is one that has been raised by the trade union movement and that I know has been covered in the Dáil, namely, the fear or concern that employers currently operating occupational pension schemes may decide to close them and move to automatic enrolment schemes. If I am correct that the Minister has agreed to share the legal advice on why she could not address this in the Seanad, I would very much welcome seeing it. My apologies if this has already been raised in the Minister's speech. There is genuine concern that some employers will move to close their occupational schemes in favour of automatic enrolment.