Willie O'Dea (Limerick City, Fianna Fail)
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657. To ask the Minister for Employment Affairs and Social Protection the steps which have been taken by her Department to date in establishing an auto enrolment pension system; and if she will make a statement on the matter. [42535/17]

Regina Doherty (Meath East, Fine Gael)
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Pensions reform is a priority for my term as Minister for Employment Affairs and Social Protection and I can confirm the Government’s intention to publish and commence the implementation of a pensions reform plan in the coming months. Perhaps the most fundamental reform measure which will be contained within this plan will relate to the development of a new auto 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.

Auto enrolment will see a transition from the current and purely voluntary supplementary pension 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. It will increase the well-being, financial security and independence of future retirees.

Preliminary work has been undertaken by officials in my Department to begin to identify the most effective, deliverable and sustainable automatic enrolment model. Previously, an Interdepartmental ‘Universal Retirement Savings Group’ (URSG) considered the issue and concluded that building reform consensus across political, business and civil society is essential for any new system. To this end, the URSG held initial consultations with citizens, employer representatives, trade unions, the pensions industry, advocacy and interest groups, as well as Irish and international experts.

A review of international automatic enrolment retirement systems by my officials has confirmed that success is dependent on well tested design principles 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.

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 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.