Willie Penrose (Longford-Westmeath, Labour)
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576. To ask the Minister for Employment Affairs and Social Protection the timeframe for the introduction of a universal pension scheme; her plans to phase in same over a number of budgets; and if she will make a statement on the matter. [41582/17]

Regina Doherty (Meath East, Fine Gael)
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I can confirm the Government will publish and commence the implementation of a pensions reform plan in the coming months. 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 systemfor 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. If measures are not taken to address this low rate of supplementary pension coverage, many future retirees will experience unwanted reductions in living standards when they reach retirement.

Automatic enrolment will see a transition from the current and purely voluntary system to one which will, subject to certain parameters, automatically enrol employees into a quality assured retirement savings system. 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.

A review of international automatic enrolment retirement systems has confirmed that success is dependent on well tested design and securing member trust. To this end, 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 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.

Subject to any Government decision regarding the manner in which this project should be progressed, it is my objective that first members would be enrolled in the new system in 2021. This project timeframe, which will not necessarily be dependent on the annual budgetary cycle, reflects the scale of such a programme and its importance as being the most fundamental reform of the Irish supplementary pension system in generations.

I hope this clarifies the matter for the Deputy.