Michael McDowell (Independent) | Oireachtas source

I move amendment No. 1:

In page 9, line 20, after “days” to insert “not earlier than 30th June 2025 as may be specified by resolution adopted by Dáil Éireann”.

I move this amendment in my name and that of the other Senators. This amendment is solely for one purpose, namely to make an appeal to the Minister to create sufficient time to allow the Economic and Social Research Institute or some other body to evaluate the alternative method of dealing with auto-enrolment put forward by Mr. Colm Fagan - which we spoke about on Second Stage - and by Mr. Paul Kenny, the former head of the pensions board, to allow an analysis as to whether it would, in fact, give more money to pensioners who are the subject matters of auto-enrolment over the years, as has been claimed.

The simple fact is that workers' pensions could be doubled by replacing the outdated investment approach proposed in the Bill with one designed especially for auto-enrolment. The Bill envisages separate investment strategies and risk management profiles for each individual. The point was made that this is grossly inefficient, sub-optimal in investment terms and would be difficult to administer. The UK experience has demonstrated this with a similar approach introduced more than a decade ago. I suggest the method of dealing with separate accounts or risk evaluations for each individual is sub-optimal and I ask that the Minister take one last opportunity to seek the advice of a totally independent, outside body - not the pensions board - to deal with this and to evaluate whether Mr. Fagan's proposal makes better sense and will be better for people who are the subject of auto-enrolment.

Deputy Richard Bruton, who is a person of wisdom, experience and also ministerial experience, made this point during the Second Stage debate on the Bill in Dail Éireann.

The question of whether it makes sense to have the pension funds split into individual ... accounts [each] with their own risk management profiles and investment strategies has been raised. I ... [have been] quite persuaded by the argument that, for a fund like that proposed, which is to be managed centrally by the auto-enrolment board, there is a strong case for the policy to maximise the return to the fund in which people would own units.

It would be a pity if everybody involved thinks that Mr. Fagan's alternative approach is the correct one that would yield higher pensions and better results for those who are the subject of auto-enrolment. The only thing I am concerned about doing is to appeal to the Minister to allow one more opportunity for somebody else to evaluate that possibility before this Bill commences. The idea of putting off the Bill's commencement date, as the amendment suggests, until that date in 2025 is to give the Minister the opportunity to send the matter to the Economic and Social Research Institute and ask for a totally disinterested and unbiased analysis as to whether the Fagan-Kenny approach would be preferable to the approach adopted on a conservative basis in the Bill. If so, this gives the Minister - even if this Bill is passed in its present form with this amendment - the opportunity to put down alternative amendments by way of a second Bill to ensure the result for pensioners is optimal and not sub-optimal.