Mark Daly (Fianna Fail)
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I welcome the Minister for Social Protection, Deputy Dara Calleary, to the House for statements on auto-enrolment. I congratulate our colleague Senator Noel O'Donovan on his new ring. This may be the first time he has been with us with the ring on. I congratulate him and his new life partner. We hope they have a long and happy marriage.

Dara Calleary (Mayo, Fianna Fail)
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I join in the good wishes and wish Senator O'Donovan health and happiness. He will be very interested in auto-enrolment.

The Government has prioritised the introduction of an automatic enrolment retirement savings system. It will be known by its brand name My Future Fund. It is a key reform commitment to support workers and a key priority for me personally as Minister for Social Protection. The scheme is necessary to address the pension coverage gap that exists in Ireland. It is estimated that only 35% of private sector workers are in pension schemes. This pension coverage gap exists despite the fact that successive Governments, over many decades, have provided significant incentivisation through tax relief. If not addressed now, this low level of coverage means that a large cohort of people will, in their retirement, be fully dependent on the State pension and whatever assets they have otherwise accumulated. For some, this will result in a significant drop in living standards.

Currently, we have four workers for every person over the age of 65. By 2050, we will have two workers for every person over 65. As well as a pension coverage gap, there is the ongoing challenge of pension adequacy because even where people may be in a pension scheme, many of them are not saving enough to ensure an adequate income in retirement that is commensurate with their lifestyle ambitions.

It is important to note that the State pension will remain the bedrock of the State pension system, providing retirees with a basic level of income and protecting them against pensioner poverty. In that context, My Future Fund will complement the State pension and provide additional income to future retirees to secure their standard of living in retirement.

Many milestones have already been reached on this journey. The legislation to underpin this new system, the Automatic Enrolment Retirement Savings System Act passed through this House in 2024. Following an extensive procurement exercise, Tata Consultancy Services, TCS, based in Letterkenny, County Donegal, has been appointed as managed service provider of the scheme’s administrative services and is busy building, configuring and testing its systems in line with the scheme’s requirements. Three investment managers - Irish Life Investment Managers, Amundi and BlackRock - are being selected following an extensive public procurement exercise. These companies are busy readying their funds and developing and testing integration with TCS. My departmental officials, who have done extraordinary work on this project to date, are continuing to work hard and are working closely with in excess of 60 payroll product developers across a range of payroll providers through the Payroll Software Developers Association to assist them with the changes they need to make to their software to facilitate the calculation and collection of My Future Fund contributions. Testing work is ongoing with the Revenue Commissioners, which will be providing vital payslip data. I recently announced the recruitment of a chief executive officer of the new National Automatic Enrolment Retirement Savings Authority, NAERSA, as well as the chair and members of its board. Further staff recruitment is at an advanced stage.

Members of this House will have seen the advertising campaign over the summer featuring ice cream with a cherry on top. This has been a continuation of the communications work that has been taking place over the past couple of years, which is now shifting from direct employer and other stakeholder outreach through webinars and in-person conferences to paid public awareness campaigns. This will continue and intensify over the coming months.

A key point in the communications strategy for every citizen, but particularly for those of in the Oireachtas, is the auto-enrolment information hub that is available at . This resource has lots of information, including explanatory videos, to explain the scheme to us so that we can explain it to all types of stakeholders.

I want to make the point that the system was deliberately branded "My Future Fund". This reflects the purpose of the scheme, namely, to save and invest for the future, while highlighting that these savings will remain the personal property of the participants. This is not a State fund. NAERSA will do the vast bulk of the administration of this scheme. There will be little for employers to do and very little administrative cost for them. The authority, which has statutory independence, will determine who will be enrolled. It will electronically issue notifications to payroll systems, collect the contributions and pool those contributions for onward investment with investment managers. It will provide online portals for employees, employers and agents to access accounts and services. It will provide a customer support service. It will ensure compliance with the scheme by following up where contributions are not collected or are collected and not remitted, up to and including the imposition of sanctions, penalties and prosecutions where necessary.

I moved the launch date from the end of September to 1 January 2026 to allow payroll providers and small employers more time to prepare and to align their systems with the normal tax year. The design of the scheme is deliberately straightforward. It is easy to understand. From the investment perspective, there is a default strategy whereby participants’ savings are moved from a higher risk to a medium-risk to a lower risk fund the closer they get to the retirement age of 66. The scheme facilitates choice between these three risk levels but does not require a choice to be made by the participant. In addition, the scheme has a "pot follows the member" approach, which means that where an employee moves from employment to employment over his or her working life, that employee can maintain the same My Future Fund account at all times. Further, the system is automated through payroll software to minimise the administrative burden for employers, especially those that do not have expertise in operating pension schemes. These design features have come about from studying what other countries have done well but also what they have done badly, with a view to doing everything better here. This is the only advantage of being the last country in the OECD to adopt such a system.

In regard to the eligibility criteria, those earning in excess of €20,000 per annum across any number of employments, aged over 23 and under 60, and not already contributing to an occupational or private pension scheme through payroll will be automatically enrolled. It is expected that about 750,000 workers will be enrolled in this way. Participants will be able to opt-out after six months’ mandatory participation, at which time they will get their own contributions back, but the employer and State contributions will remain invested in their accounts.They will also be able to suspend their participation for up to two years. In all cases where a person opts out or suspends, they will be automatically re-enrolled after two years, after which opt-out and suspension options will be available again. Anyone who is outside of these age and income thresholds may voluntarily opt in to the scheme. Where they do, their employer and the State will be compelled by the legislation to contribute as if they had been automatically enrolled.

I will address the suggestion that the self-employed should be eligible for My Future Fund. It will not be available to the self-employed during the initial phase because the payroll-based operational model this system is based on does not suit the self-employed. The system is based on there being an employer who pays an employee through an established payroll facility, which is absent for the self-employed. The fixed contribution rates for auto-enrolment may not suit them either, given the variability of their weekly or monthly earnings. I am unaware of any country that has successfully included the self-employed in its auto-enrolment system. An attempt to do so in Chile, for example, failed and was ultimately substituted by a legal requirement on the self-employed to contribute to a private pension on their own behalf. It is important to note that the self-employed in Ireland already have the entire private pensions market, as well as State support in the form of generous tax relief allowances, to help them save for retirement.

In terms of how much workers will save to My Future Fund, contributions will be made equally by employees and employers, with the State providing a top-up of €1 for every €3 saved by an employee. In short, every €3 saved by an employee will automatically become €7. Contributions will start at 1.5% of gross pay, increasing to 3% after three years of operation, to 4.5% after a further three years of operation and finally to 6% from year ten. This will, in effect, add up to 14% of an employee's gross income and is the very least that international evidence suggests is an adequate rate of saving. The incremental implementation of contribution rates will allow employees and employers to adjust over time.

The money will then be invested, as I have already mentioned. While NAERSA will ensure all investments will be in line with the prudent person principle, and in the best long-term interests of the participants, each of the contracted-for-investment services will be required to have environmental, social and governance, ESG, principles applied to it in accordance with section 74 of the auto-enrolment Act 2024.

At the end of this investment period, each participant will be able to access their savings pot once they reach the State pension age of 66. In the first few years of the scheme, drawdown products will be limited to a simple lump sum payment because savings pots will be relatively small. Taxation arrangements are being provided for separately in the finance Bill but they will broadly align with the tax treatment of PRSAs, including the application of the tax treatment of trivial pensions. Further drawdown options will be developed over the coming years alongside the annuity and ARF options that are already available from the pensions market, but this will be for NAERSA, which is statutorily independent, to consider and make recommendation on.

A number of issues were raised following our audiovisual room briefing in July and the Dáil debate last week. One is that the NTMA should invest the savings of participants, rather than NAERSA investing the savings in the commercial market on their behalf. This suggestion comes from the wish of some to keep participants’ funds entirely away from the services of the market. However, that desire would not be fulfilled by involving the NTMA because the NTMA invests State money in the international stock market and uses commercial investment managers from private industry to do so. Therefore, nothing would change by requiring the NTMA to become involved in My Future Fund; in fact, all that would happen is the NTMA would have to set up a NAERSA-type entity, which we are already doing.

A Sheanadóiri, I took this time to briefly explain the policy rationale for introducing My Future Fund to ensure that we all as public representatives have a clear understanding of its key features. This will be a transformative scheme for this country and will bear great fruit, particularly for younger generations. It will not be without its challenges, however, and I want to work with all Senators in addressing those challenges and the inevitable teething problems. Ultimately, My Future Fund and the auto-enrolment system is an investment in our country's future.

Anne Rabbitte (Fianna Fail)
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I welcome the opportunity to speak on the introduction of Ireland's new auto-enrolment retirement savings scheme, a landmark reform that Fianna Fáil in government has helped to deliver and a reform I believe represents a fundamental and long-overdue transformation in how we as a society approach retirement. This is more than a policy announcement; this is about making good on our commitment to protecting workers, promoting fairness and planning responsibly for the future.

Fianna Fáil has always believed that prosperity must be paired with protection and the benefits of economic growth should be felt by all, not just in the here and now but across the course of one's life, including into retirement. This auto-enrolment scheme reflects that principle and ensures that people who work hard all their lives can retire with dignity and financial security, not fear or dependency.

Today, over half of private sector workers in Ireland have no supplementary pension. They rely solely on the State pension and, while that remains a crucial safety net, we know it is not enough to provide for a comfortable retirement on its own. Fianna Fáil has long argued that early and consistent saving is a key to long-term financial resilience but we also recognise that many people, especially younger workers and those in low-paid or precarious jobs, simply do not have the structures or supports to make that happen. That is why the introduction of automatic enrolment is not just a policy initiative, but a social contract that will yield dividends for generations to come. It turns the system on its head, moving from one that relies on people opting in to one where people are automatically enrolled but still retain a choice.

To briefly summarise, from January 2026 employees aged between 23 and 60 earning over €20,000 per annum and not already enrolled in an occupational scheme will automatically be enrolled in a new retirement saving scheme. Contributions will begin modestly at 1% to 1.5% of gross earnings, rising gradually over a ten-year period to 6%. Employers will be required to match these contributions and the State will contribute an additional 33%. Importantly, contributions will be capped at earnings up to €80,000 and individuals will always retain the right to opt out, though the evidence from international best practice suggests most will stay in. The pension pot will follow the worker throughout their career, ensuring continuity, flexibility and security, even as people change jobs and move between sectors. It will be administered by a new body, the National Automatic Enrolment Retirement Savings Authority, which will be tasked with ensuring transparent governance and strong fiduciary oversight.

I will highlight a few of the many positive aspects of this reform. First and foremost, it represents a proactive move towards financial dignity in later life. It shifts pension savings from an optional extra, often only accessed by higher earners, to something routine, normal and accessible to all. Second, the co-funding model is hugely powerful. For every €3 workers put in, they effectively get €3 from their employer and €1 from the State. Third, the gradual phasing-in of contribution rates ensures neither workers nor businesses are hit with an immediate financial burden. It allows for budgeting adjustment and education. Fourth, the design is inclusive. It actively targets those least likely to be covered by a pension: young workers; those in part-time or non-unionised roles; and women, who are underrepresented in the pension system. Fifth, the scheme has the potential to transform our culture around long-term planning. For many people, pensions are complex, intimidating and opaque. Auto-enrolment simplifies that. It meets people where they are at and gently nudges them towards better outcomes.

Let us look ahead to the kind of society we want in 20, 30 or 40 years. It is one where those who have worked all their lives can retire with security and peace of mind, not fear or financial stress; one where the State pension is supplemented, not solely relied upon; and one where the burden on future taxpayers is reduced because we planned ahead.That is the Ireland we are helping to build with this policy. This is the future we are securing, not just for today's workers, but for generations to come. I commend the Minister and the Department on advancing this vital reform and I commend the employers, unions and advocacy groups that have constructively engaged with its development. Fianna Fáil has always stood for pragmatic social progress and the auto-enrolment scheme is a shining example of that approach. It aligns Ireland with best practice internationally, addresses a major gap in our pension infrastructure and empowers working people to build a better future. Let us support it, refine it where necessary and, above all, work together to ensure that it delivers on its promise of a fairer, more inclusive and secure retirement scheme for all.

Noel O'Donovan (Fine Gael)
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I thank the Cathaoirleach for his kind words on my marriage. I got a new job in recent weeks and have probably the most important work of my life ahead. I also thank colleagues for their kind wishes. On a sadder note, this is my first time back in the Chamber since my colleague Councillor Patrick Gerard Murphy passed away in west Cork. I want to put on record my appreciation for the work he did in west Cork. He did politics the right way. He worked behind the scenes with officials and long before there was a formalised coalition between Fianna Fáil and Fine Gael, that is the way it worked in west Cork. He was acknowledged by my colleague Senator Murphy O'Mahony last week. We lost a good man in west Cork.

I am glad to speak in the Seanad today on an issue that affects so many workers in Ireland but that we do not talk about often enough, namely, retirement security. I look at this issue through three different lenses from my experience as an employee, an employer in a family business and now as a legislator determined to support fair, balanced and sustainable public policy. Employees across this country contribute so much to society and it is essential that retirement not be a worrying or complicated process. The new auto-enrolment pension scheme is crucial in helping employees to secure their future without the bureaucracy that can sometimes come with pensions. As has been mentioned, this reform will support over 800,000 people to save for their retirement. At present, there is a significant pension coverage gap in Ireland, with many workers not part of any scheme. Auto-enrolment will play a major role in closing that gap. This is about fairness by ensuring workers have access to a simple and efficient way to save for their retirement.

The Government will continue to work with employees and employers to support people in later years. I acknowledge the work of the Minister, the officials in his Department and the work of the previous Minister, Deputy Humphreys, who drove this reform with great determination. Both Ministers were dedicated to ensuring that workers across the State would be recognised for all they had done and could look forward to retirement with dignity, clarity and confidence. This reform is long overdue. Until now, Ireland has been one of the only countries in the OECD without a mandatory auto-enrolment pension system. Auto-enrolment represents an investment by the individual, the employer and the State in the long-term well-being of workers across Ireland. It is pro worker and pro enterprise and a system that I am immensely proud to support.

Concerns have been expressed by some in the business community. The scheme is strongly pro worker but we have to acknowledge the concerns raised by the business community. Ireland's small business sector is an important cornerstone of our economy, community and societal well-being. Our SME sector is experiencing strain from a combination of factors that have been well documented. For many employers, particularly small and family-run businesses like my own, there are natural worries about the cost of pension contributions and the additional administrative responsibilities that auto-enrolment will bring, but this is good policy. We have to step forward and introduce this scheme because it is the right thing to do. There are genuine concerns and they should not be dismissed, and as part of the budgetary process, I am sure this Government will support businesses to work through the current difficulties they face.

It is important that we proceed with auto-enrolment and see it not just as a cost, but as an investment. It is an investment in the long-term financial well-being of employees, in workplace stability and in building trust between employers and their staff. A workforce that feels secure about its future is a more motivated and productive workforce. By sharing responsibility across employees, employers and the State, this scheme is carefully balanced. Employers are not being asked to carry the burden alone. Instead, they are playing a vital role in a partnership that benefits society as a whole. This is why, despite understandable initial reservations, this is a reform that the business community can stand behind. It is about building a stronger, fairer Ireland where both workers and businesses thrive. The new My Future Fund acknowledges that both employers and the State must play a role in retirement security. It is a progressive and modern reform that puts the employee first and brings much-needed clarity to the retirement process. This reform ensures that after a lifetime of work, people can retire with dignity and security. Auto-enrolment is not just a policy; it is fairness in action and I am happy to support its introduction.

Maria McCormack (Sinn Fein)
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Sinn Féin supports auto-enrolment in principle and has been consistent in advocating for the right auto-enrolment system at the right time. It is important that the scheme is done right and that is why we do not support this Government's version of auto-enrolment and did not support the Automatic Enrolment Retirement Savings System Bill in 2024. There are three main issues with the Act. The first is that low-paid workers will not be allowed to opt out and claim back their money until after a six-month mandatory waiting period. Second, now is just not the right time. A worker earning €20,000 per year, for example, would be down by roughly €5.76 per week. That is an extra €20 to €30 per month and for a lot of people, that is more than they can afford right now. The cost-of-living crisis is already crippling people across the country. I know from talking to constituents in Laois, where there are significant wage disparities compared to many other counties, that this will have a serious impact on many people's ability to pay their bills. We all know the cost of everything is going up and up. This will be a dent in their take-home pay and they just cannot afford it right now.

It is fair to say that mandatory engagement with the scheme for a full six months is an overly paternalistic approach, particularly for low-paid workers who are barely scraping by. It is just another example of how out of touch this Government is with the daily struggles of ordinary workers and families. We know that after housing costs are factored in, one third of households cannot afford to pay their electricity bills and one in five children in this country are growing up in poverty. Next week, the Government will announce its budget and it has been made clear that there will be a rolling back on cost-of-living supports, which will also make the winter bills much harder for people to pay this year.

Third, and very importantly, we have serious concerns about who is responsible for the fund. In our submission back in 2018, we proposed that the State should play a lead role at the heart of the auto-enrolment scheme and that the NTMA would be central to this in managing these funds and investing them for the benefit of the citizens. Managing the funds under the NTMA would have been a chance to put in place secure, renewable infrastructure that would make a real, meaningful difference to the people who are paying some of the highest electricity bills in Europe. It would have been a chance to invest in social and affordable housing and would have made a real difference to people who are paying some of the highest rents in Europe. It would also have ensured that workers would not have to now pay into a fund that they know will be a €1 billion-plus bonanza for the private sector. Instead, auto-enrolment as this Government will implement it is a gift to the private pension industry.

Nessa Cosgrove (Labour)
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Cuirim fáilte roimh an Aire. I welcome the opportunity to contribute on the discussion on auto-enrolment. As we all know, the best time to start a pension is as early in one's career as possible. However, the reality for too many people, particularly low-paid workers and those at the beginning of their working lives, is that there is no spare capacity in the weekly or monthly budget to pay for pensions. I know that from personal experience. As a low-paid youth worker for years, it is only in the last few years that I have been able to afford to contribute to a pension. The lack of affordability has led to low rates of pension uptake among younger workers and those who remain on low wages throughout their working lives. An estimated 811,000 workers currently have no occupational or private pension provision. In previous years, many of those people would be condemned to poverty in their old age.

The voluntary nature of pension provision in the past has failed low-paid workers.The Labour Party has been supportive of the introduction of an auto-enrolment pension scheme for many years. It has been well overdue. Having the voice of Patricia King on the board of the new National Automatic Enrolment Retirement Savings Authority demonstrates that members' interests will be at the heart of the new authority. Having a large State fund gives additional security and investment potential to a pension scheme.

I would like to see these benefits extended to younger workers aged between 16 and 23, who are currently excluded from the scheme, as even small amounts contributed during these early years would have a disproportionately beneficial impact upon the pension amount available at the end of a working life. If 16-year-olds are old enough to make PRSI contributions, then surely they are old enough to be included and entitled to the benefits of auto-enrolment.

Having a large State fund that is managed according to strict ethical guidelines could also have a beneficial impact upon the ethical approach taken towards pension funds across the whole of the free market. This is an opportunity for us to say that we do not want our collective retirements built upon the profits of companies that profit from fossil fuel exploitation, war or pornography benefit or that benefit from child or slave labour. The introduction of this scheme has much to be commended, but some protections and reassurances are required. We need to be clear on how this scheme will relate to the State pension, that it will complement and not replace the State pension. Similarly, we need assurances that the Government remains committed to achieving a benchmark of 34% of gross average earnings for the contributory State pension, such as was set out in A Roadmap for Pensions Reform. We need certainty and safeguards that the workers contributing to the new scheme will not face a means test for the State pension in the future.

We also believe, crucially, that self-employed people should be included in auto-enrolment. This is necessary to ensure that the companies are not incentivised to place workers on bogus self-employment, which we know only too well in this House, in order to avoid needing to pay auto-enrolment contributions. We have seen the proliferation of such contracts in recent years, such as among RTÉ staff, leaving many without pensions. Coverage among self-employed people is already too low. As the Bill progressed through the Oireachtas, as a party, we repeatedly raised the importance of ensuring that this scheme cannot be sidestepped by employers or ensuring that employers are not incentivised to wind up good, existing workplace pension schemes. For example, we as a party proposed an amendment that would have stopped employers winding up or freezing workplace pensions during the ten-year transition period while the scheme was coming into effect, but this was rejected by the Government. As the scheme is now being implemented, we need to ensure that safeguards are put in place, that this will deliver for workers and does not create incentives for employers to scale back existing pension entitlements.

Laura Harmon (Labour)
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Cuirim fáilte roimh an Aire. I will be echoing a lot of the points made by Senator Cosgrove. I welcome the roll-out of the new auto-enrolment scheme. This something we in the Labour Party have long been calling for. I also welcome the appointment of Patricia King, former general secretary of the Irish Congress of Trade Unions, ICTU, to the board. ICTU has a positive role to play here. This is something the Labour Party highlighted as this Bill was being progressed through the Oireachtas.

This scheme will work to address disparities in pension provision. The 2024 CSO statistics show us that those aged 55 to 69 had the most coverage at 75%, while those aged 25 to 34 had less than 60%. It has been clear for some time now that Ireland's voluntary approach to pension savings is failing. Countless workers are being left without coverage after working their entire adult lives. This is unacceptable. Ireland has been lagging behind for too long. We were the last OECD country to introduce an auto-enrolment system. ICTU highlighted that 811,000 workers are without a workplace pension. Each and every one of these people will feel the impact of this delay.

There are also considerations that must be accounted for come January. This scheme should add to and not take away from any existing provisions and should never become a replacement for State pensions. We need to hear assurances for those contributing to the new scheme that this will work to complement their pension and that they will not be subject to means tests for their State pension as a result. We have also seen that pension cover for self-employment contracts are insecure in nature. There needs to be cover for these individuals and a guarantee that they will be included in the auto-enrolment scheme. This is vital to prevent companies from placing workers on fabricated self-employment contracts as means of avoiding contributing to their pensions. Many have been left without pensions in recent years due to being placed on self-employment contracts, most notably in RTÉ.

Another group that needs to be accounted for is young workers. Despite PRSI contributions beginning at 16 in some cases, the minimum age threshold for inclusion in this scheme is 23. This leaves seven valuable years where workers could begin to build up their pension fund. Young workers are some of the most precarious in terms of their roles, so their inclusion needs to be an important consideration. The Labour Party proposed an amendment to this Bill when it was before the Oireachtas which aimed to prevent employers from winding up or freezing effective workplace pension schemes during the ten-year roll-out of the scheme. This was rejected by the Government, but we are continuing to call for safeguards that would ensure that this scheme has positive effects on workers and does not incentivise employers to scale back any existing entitlements.

Maria Byrne (Fine Gael)
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Before I move to the next speaker, I welcome our colleague, Senator Evanne Ní Chuilinn and her guests from Fine Gael Dublin South-Central. You are all very welcome. I hope you enjoy your visit here this evening. You are in very capable hands.

Shane Curley (Fianna Fail)
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I will not repeat everything that has been said about the positives of this move except to say that I hugely welcome the movement towards auto-enrolment. One of the huge positives I see that has not been mentioned today by Senators is the mobility of the fund. Nowadays, people do not have lifelong careers in one particular job as much as they did previously. The fact that the fund moves with the person as he or she goes from job to job is hugely welcome.

I would like to pick up, respectfully, on a couple of points Senator McCormack made about the Government being out of touch on this. What would be out of touch is to allow us to move towards an apocalyptic scene in 30 or 40 years' time, when I hope I will be retiring, where there is no money left in the country if we allow things to develop the way they currently are. There is a runaway train of people at retirement age and not enough young people coming through the system to actually contribute PRSI to allow for elderly people to be looked after. I really do care about the care of the elderly. That is something we need to have a conversation on. I respectfully disagree with what the Senator said on that.

I also raise the issue of a €1 billion bonanza for the private sector. Who is going to pay for the public to actually administer the funds? Will it be the same squeezed taxpayer that we have right now? We will either cost the State a fortune or trust private companies with the system. I respectfully disagree with the points that were made.

I will share some of the concerns that were raised regarding ESG and ethical investment of the funds. There was a talk in the audiovisual room about this recently. I really appreciated the presentation that was given but we did not get a huge amount of clarity about the actual ethical side of the investments. I would share some concerns about when people work hard for 30 or 40 years and put some of their money in an auto-enrolled pension that we are sure it is being invested in ethical causes. It is important we have the clarity on that because they are trusting the State with their money. We need to make sure that we play an active role in the monitoring of the ESG side of this.

As a secondary school teacher, I would love to see far more financial well-being education at second level. If a culture could be embedded through conversations in the classroom that would allow for financial hygiene to be a norm in the mind of a young person leaving secondary school, we might not see people pulling out of this and the opt-out clause may not even be in people's minds in a few years' time. The tapering off of the fund as regards the risk level is hugely welcome. It is a very clever move on the Government's part to allow that little bit of risk for those in their 20s and 30s and to taper it off.

Ollie Crowe (Fianna Fail)
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I thank the Minister, Deputy Calleary, for joining us this evening. I welcome the introduction of the My Future Fund scheme. First, it addresses a growing problem that affects many workers in Ireland, namely, the lack of retirement savings. For years, a traditional State payment has been the main source of income for people when they stop working, but the truth is the State pension alone often does not provide enough to live comfortably. As life expectancy increases and the cost of living continues to rise, many people find themselves unprepared for retirement. This new scheme will help to fill that gap by encouraging people to save for their own future in addition to what they get from the State.

As the Minister outlined, the key feature of the pension auto-enrolment scheme is that it automatically enrols workers in a pension plan if they meet certain criteria. This means that people will start saving for their retirement without needing to take action. It is a simple, hassle-free way to make sure that everyone who is eligible is on track to build up a pension pot. This is especially important because research shows that many people simply do not get around to setting up a pension plan on their own, often putting it off until it is too late.

Another positive aspect of the scheme is that it is a shared responsibility. Both the employer and employee contribute to the pension and the State makes a contribution.This means that employees do not have to bear the full burden of saving for retirement on their own. It also takes some of the pressure off employers who have long been concerned about their role in helping employees to save for retirement. This collective approach is a win-win for everyone involved. Importantly, the scheme gives workers the option to opt out, but the reality is that most workers will likely stay in because the benefits far outweigh the downsides. Also, as time goes on, the contribution rates will increase gradually, making it easier for workers to adjust without feeling overwhelmed.

I have a couple of brief questions. In regard to the self-employed, will the Minister expand on other options that would be available for them? It is important at some stage to introduce them to the scheme. I know it cannot be done in the first instance. Also, I notice there is a management fee of 0.5%. Over time, that will be a hugely significant amount of money. For example, in the UK, the national employment savings trust has a maximum management fee of 0.3%. Will the Minister also share his views on that?

Dara Calleary (Mayo, Fianna Fail)
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I thank all the Senators for their inputs this evening. I join with Senator O'Donovan and, indeed, all of the Senators in paying my tribute and my respect to former councillor, Patrick Gerard Murphy, on his passing. I express my sympathies. He was a brilliant representative, a courageous man and somebody who always had the good of Cork at his heart. Ar dheis Dé go raibh a anam.

I have a very long script, full of technical stuff. I will try to deal with some of the queries and revert to the Senators. I thank Senators Rabbitte and O'Donovan for their welcome for the scheme. Senator Rabbitte had a lot of questions about the scheme in committee back in July. We tried to engage with her on that and obviously we answered a lot of those queries.

I might ask Senator McCormack, when is the right time? At this stage we are lucky. Our pension provision is relatively well-catered for as public service workers. When we have four workers for every person over the age of 65, do we wait until 2050, which scarily enough is not that far away, when we will have two workers for every person over 65 and when our State pension system, which will continue to be the bedrock, will become challenging? Do we continue to speak about pensioner poverty and not actually take the hard calls to get people engaged now? Pensions fry people's heads, especially younger people. When we are in our 20s and 30s, we all think that can wait, whether we can afford it or not. Senator Cosgrove made a good point that, when starting off in life, it is a difficult time. We are the last country in the OECD to implement an auto-enrolment such a scheme. Let us remember that. That is not something to be proud of. As our demographics change, we have to make the tough calls on that now.

On it being a boon to the pension industry, I do not think so. A total of 800,000 people are going to come into the pension industry for the first time ever. Because they are coming in on lot, we have seen already that in terms of our contracts with Irish Life, Amundi and BlackRock the administration fees that are going to be paid are much lower because we are bringing 800,000 people to the table, as opposed to each of those 800,000 people going separately. We have used the power of that 800,000 to get a much lower rate on the necessary administration fees. The pension industry is absolutely not happy with this. Pension providers certainly tried to resist this for long enough in terms of information.

I dealt with the NTMA issue because Your Future Fund is yours; it is not country's. It will be invested to maximise the return for you. Senator Curley raised the point about ethical investment. That is laid out in legislation. Section 74 of the Act is very clear in terms of ESG. I will be instructing NAERSA to be very awake to that, and not just ESG but to other priorities that people have that may not be within the ESG issue.

In response to Senators Cosgrove, Harmon and Crowe, I was absolutely delighted to see Patricia King come forward to the Commission for Public Service Appointments. Hundreds of people applied to be on the board of NAERSA, which was really interesting. There were exceptionally talented people with really good experience of big projects and small projects. I am delighted to see Patricia King appointed. She is one of an exceptionally talented board. She will take no nonsense on behalf of workers. I welcome that appointment.

In relation to self-employment, I went through the reasons it has not worked internationally in terms of the inability for them to register, but it is something I am very conscious of. The whole area of bogus self-employment, which was raised by the Labour Party Senators Cosgrove and Harmon and was raised in the Dáil last week, is something I will be tasking NAERSA to be vigilant to. The CEO of NAERSA began work this week. We have been very much awake to that.

In regard to young workers, as we embed and strengthen the system, we can look to this issue. It comes back to a point Senator Curley made. This is transferable. Your Future Fund is yours. You bring it with you from employment to employment. We are trying to make that a key part of it as we all go through multiple employments. The days of a job for life are gone. We need to make sure people own and have possession of their fund as soon as they start working and contributing PRSI. NAERSA should absolutely focus on that aspect.

In response to Senator Harmon, the contributory State pension is about €21,000 or €22,000 a year. That is a big drop for somebody on the average working wage at retirement. This is to add to that. The means test has been highlighted here this evening and in the Dáil last week. That is not an issue that will arise for some time, until that builds up. However, it is something I will be highlighting during my time as Minister to be aware to.

In response to Senator Crowe on the management fees issue, NAERSA is going to be a strong body in running this scheme. It is not going to come from the Exchequer. Equally, this will also be monitored by the Pensions Commission and the Financial Services and Pensions Ombudsman. Those owners of My Future Fund, those 810,000-odd people will have the same rights as anybody with a pension in terms of monitoring this.

Gabhaim buíochas le gach Seanadóir as an díospóireacht seo. Tá sé thar a bheith tábhachtach sna seachtainí romhainn, it is important that we start raising awareness of this and that, at the end of December, people will have deductions. Senator McCormack raised that issue. There is never a good time to have a deduction but this is a deduction that will get a top-up from the employer and a top-up from the State and will be available to people when they do not have the chance to raise extra income. When they are going into retirement, their chances to raise that necessary extra income to supplement their State income will come through the My Future Fund. The chance to have a good standard of living at a time when they do not have the opportunities to raise money as they may have while working will be there through My Future Fund. That is why we are doing it now.

I have asked the Department to change the tone of the communication so that people are not surprised and not shocked when that deduction happens. That deduction is a long-term investment in their family, in their selves and in their retirement.

Maria Byrne (Fine Gael)
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When is it proposed to sit again?

Anne Rabbitte (Fianna Fail)
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At 10.30 tomorrow morning.