Brendan Griffin (Kerry, Fine Gael)
Link to this: Individually | In context | Oireachtas source

387. To ask the Minister for Employment Affairs and Social Protection if she will provide clarification on a matter in relation to a pension (details supplied); and if she will make a statement on the matter. [59412/22]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is my understanding that the question relates to the automatic enrolment retirement savings system and therefore will answer on that basis.

Automatic Enrolment (AE) is a State sponsored, quality assured, retirement savings system. It is separate to the State Pension which will remain the bedrock of the Irish pension system. It will be of particular benefit to the estimated 65% of people working in the private sector who are not currently paying into a supplementary pension scheme.

Employees who meet certain age and earnings criteria and who do not already have an approved pension plan will be automatically enrolled. They will have the choice to opt-out or suspend their contributions after six-months mandatory participation. Anyone who opts out or suspends their participation in this way will be re-enrolled after two years. In such circumstances, they may opt-out or suspend again after a further six-months mandatory participation.

Employees will make contributions from their salary, which their employer will be required to match. Contributions will be set at 1.5% of gross salary initially for the first three years, then rising by 1.5 percentage points to 3% for the next three years, then rising by a further 1.5% to 4.5% for the three years after that, and finally rising by a final 1.5% to reach the full contribution rate of 6% in year 10 following the introduction of the scheme. The State will make a further top-up contribution at a rate of €1 for every €3 contributed by the employee.

Employee contributions will be deducted from the employees’ earnings at source and remitted to a new Central Processing Authority, which will be a state body, for investment, along with the employer and State contributions.

The employee, who has been paying into this State-incentivised investment system, will have access to their money at the State pension age.

It is envisaged that the enrolment of the first AE participants will commence in early 2024. Working towards that date, the focus is now solely on implementing the system, including by drafting the necessary legislation that will underpin it, designing the organisational structures and the technical system to operate it, and communicating this landmark reform to stakeholders and the public.

I hope this clarifies the matter for the Deputy.