Written answers

Wednesday, 28 April 2021

Department of Employment Affairs and Social Protection

Pensions Reform

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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673. To ask the Minister for Employment Affairs and Social Protection the status of the implementation of the pensions auto enrolment system; the expected commencement date for the implementation of the system; and if she will make a statement on the matter. [22159/21]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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The Programme for Government contains a commitment to introduce a pension auto-enrolment system. The objective of this commitment is to address the low proportion of employees in Ireland with supplementary pension cover, which includes both occupational and personal pensions.

The rate of supplementary pension coverage in Ireland is around 55% of the working population (CSO, Pension Coverage Survey 2020) and it is estimated that this reduces to less than 35% when the private sector is considered in isolation. Many of these people will become reliant on the State pension for all or most of their income in retirement and accordingly, may face a significant unwanted drop in income.

Although the Roadmap for Pensions Reform 2018 to 2023 provided for the development and implementation of an Automatic Enrolment (AE) retirement savings system by 2022, this Government recognises the exceptional strain that both employers and employees are now under as a result of the Covid-19 emergency. Therefore, the Government will seek to gradually deliver an AE system, based on the following principles:

- There will be a phased roll-out, over a decade, of the contribution made by workers.

- Matching contributions will be made by both workers and employers and the State will top up contributions.

- There will be an opt-out provision for those who choose to opt out.

- Workers will have a range of retirement savings products to choose from.

- There will be a charges cap imposed on pension providers.

The Department of Social Protection continues to work on the design of the AE system. There are five main areas where work is ongoing so as to produce design options. These areas relate to:

- the scope and role of a Central Processing Authority for the system;

- the nature and functions of Registered Providers of savings products;

- the investment framework and funds to be offered by Registered Providers, including the design of the default fund and the pay-out phase;

- the design of the State financial incentive; and

- the phasing of implementation.

In progressing this work, the Department is receiving technical support from the European Commission’s DG Reform which assists EU member states implementing administrative and institutional reforms.

I hope this clarifies the matter for the Deputy.


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