Róisín Shortall (Dublin North West, Social Democrats)
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509. To ask the Minister for Employment Affairs and Social Protection further to Parliamentary Question No. 149 of 25 May 2017, her plans for the development of an auto-enrolment pension system; and if she will make a statement on the matter. [40423/17]

Róisín Shortall (Dublin North West, Social Democrats)
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512. To ask the Minister for Employment Affairs and Social Protection the position regrading the action plan for the reform of pensions as mooted by her predecessor; and if she will make a statement on the matter. [40426/17]

Regina Doherty (Meath East, Fine Gael)
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I propose to take Questions Nos. 509 and 512 together.

Progressive reform of the pension system is a priority of mine and this Government. To this end, I can confirm the Government’s intention to publish, and commence the implementation of, a pensions reform plan before the end of this year.

The plan will include measures relating to the introduction of a ‘Total Contributions Approach’ to the State pension for new pensioners, reform and simplification of the current supplementary pension landscape and measures required to transpose the EU ‘IORP’ Pensions Directive. However, perhaps the most fundamental reform contained within the plan will be a confirmation of the Government’s intention to develop a new automatic enrolment supplementary retirement savings system for employees without pensions coverage.

The rate of supplementary pension coverage in Ireland is 47% of the working population and this reduces to 35% when the private sector is considered in isolation. Whilst the State pension provides a reasonable basic level of income and guards against poverty in retirement, if measures are not taken to address this low rate of supplementary coverage, many future retirees will experience unwanted reductions in living standards when they reach retirement.

This reform, where the saver will maintain the freedom of choice to opt-out, will encourage long term saving and asset accumulation amongst those who may otherwise suffer a reduction in living standards at retirement. It will increase the wellbeing, financial security and independence of future retirees.

A review of international auto enrolment retirement systems has confirmed that success is dependent on well tested design and securing member trust. To this end, further detailed evidence building and consultation will be undertaken to inform fundamental choices which are required regarding the preferred operational structure and organisational governance for a new system as well as many design elements such as contribution levels, financial incentives and target membership. Correctly positioning/designing each of these will be critical to the success of any system.

To this end, it is my intention to undertake an automatic enrolment open consultation process over the coming months. This process will seek to develop consensus around the principles of our approach to system infrastructure, design and implementation. It will build on our previous engagement with sectoral interests including employer and trade union representatives as well as the pensions industry and consumer and advocate groups.

The objective of planned reforms will be to establish a sound and fit for purpose pension system for the coming decades, one that will shape the retirement landscape to the benefit of our retirees for generations to come.

I hope this clarifies the matter for the Deputy.