Noel Grealish (Galway West, Independent)
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213. To ask the Minister for Employment Affairs and Social Protection further to Parliamentary Question No. 213 of 6 November 2019, if she envisages a conflict between the personal retirement savings account which operates without the need for a central processing agency and the proposals for auto-enrolment; and if she will make a statement on the matter. [46722/19]

Regina Doherty (Meath East, Fine Gael)
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I am pleased that the Government recently approved significant elements of my design of an automatic enrolment retirement savings system which will commence in 2022.  Key decisions have now been made in relation to the target membership, the contribution rates, the policies in relation to opting-out and re-enrolment, the administrative arrangements and organisational approach and the investment options. 

In common with pension systems internationally, Ireland’s pension system operates on the basis of a multi-pillar approach.  This entails a publicly managed ‘first pillar’ - the State pension, a ‘second pillar’, consisting of occupational pensions, and a ‘third pillar’ consisting of private, individual pension plans funded from personal savings, such as Personal Retirement Savings Account (PRSAs).  In order for people to enjoy an adequate income in retirement, the State pension should, in most cases, be combined with a supplementary private retirement savings arrangements in the form of a ‘second pillar’ occupational pension and/or a ‘third pillar’ personal pensions.

The aim of automatic enrolment is to improve supplementary pension coverage and adequacy among the high level of those who work in the private sector, who do not have a supplementary pension, and who are likely to experience an unwanted reduction in living standards when they reach retirement.

To coordinate the administration of the automatic enrolment system, a Central Processing Authority (CPA) will be established by the State.  The precise operational arrangements for the CPA are currently being worked out.

The automatic enrolment system will be an employment based system linked to earnings.  As a second pillar pension, automatic enrolment will complement the existing supplementary pension system, which includes third pillar PRSAs.  Therefore, the introduction of the automatic enrolment system, including the setting up of a CPA, will in no way conflict with current private pension plans in the form of PRSAs.

I hope this clarifies matters for the Deputy.