Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I will say this again because I do not think it was understood the first time.Investment decisions will be the responsibility of the investment managers operating under a services contract with NAERSA. The investment strategy is set out in the Bill in quite some detail and NAERSA, in negotiating contracts with investment managers, will apply those statutory requirements. ESG arrangements are further provided for in section 74, which sets out the investment rules that will be applicable to contracted service providers. This section ensures ESG considerations will be taken into account when the investment management providers invest participants' savings. In addition, section 75 provides that the obligations of the State under international agreements on environmental sustainability and climate change must be taken into account in the framing of the investment management contracts. The State's obligations with regard to relevant international agreements, although not needing to be specified in the Bill, include the sustainable finance disclosure regulation, the UN Global Compact and the Paris Agreement, which guide the international community on matters such as carbon emissions and investment in unethical assets.

The inclusion of an additional and highly specific fund as proposed by the Senator would add to the costs of the system, which would be borne by the participants. This is because the system is based on a default approach whereby all participants will be brought into a default investment strategy and then given the option of making an alternative choice. However, the vast majority of participants will not in fact make an active choice. Evidence in the UK has shown that 99% of those placed in NEST funds remain in the default funds despite a range of alternative options being made available. For that reason, an extra fund in the AE system would be uneconomical. I will leave it at that.