Written answers

Tuesday, 22 March 2022

Department of Employment Affairs and Social Protection

Pension Provisions

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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15. To ask the Minister for Employment Affairs and Social Protection the projections for the annual collection of funds under an auto enrolment pension scheme; if it is proposed to deploy these funds for specific purposes; and if not, will they be managed in a particular way. [14875/22]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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The Programme for Government commits to introducing a pensions automatic enrolment (AE) system.  A key objective in establishing this system is to address the low proportion of employees in Ireland with supplementary pension cover, which includes both occupational and personal pensions.

According to CSO figures, the rate of active supplementary pension coverage is around 56% of the working population (Pension Coverage Survey 2021).  It is estimated that this rate could be as low as 35% when the private sector is considered in isolation.  As a consequence of this low supplementary pension coverage rate, many retirees may suffer an unwanted reduction in living standards when they retire.

My Department has finalised a proposal for Government on the overall design of the Auto Enrolment system and I intend to bring that to Government for consideration towards the end of this month.  If that proposal is approved, I will be publishing the design in detail, including how the system will be administered and how savings can be invested.

In the meantime I can confirm, as previously agreed by Government, that:

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

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

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

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

- There will be a charges cap imposed on fund managers.

I hope this clarifies the matter at this time.

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