Joan Collins (Dublin South Central, Independents 4 Change)
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222. To ask the Minister for Employment Affairs and Social Protection if her Department has considered any other proposal for an auto-enrolment pension system where one system could be up to 70% better value than that currently being designed; and if she will make a statement on the matter. [22112/23]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The introduction of an automatic enrolment (AE) system is a Programme for Government commitment and a key priority for the Minister for Social Protection. Under AE, employees will have access to a savings scheme, co-funded by their employer and the State. For every €3 a worker pays into it, they'll have another €4 credited to their account, and the contributions will all then be invested. It will be supplementary to the State Pension and 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. Implementation of the AE system is well underway, with the first enrolments expected in 2024.

The proposal referred to in the question has been considered by officials in my Department and discussed with other relevant Government Departments and agencies. I recently referred this proposal to the Pensions Council for an independent external evaluation of the issues involved.

The Pensions Council was set up to advise the Minister for Social Protection on matters relating to policy on pensions. Membership of the Council has been constituted to ensure the relevant skills, specialist knowledge, and experience is in place to allow for the provision of collective advice, information and assistance in the development of pensions policy. The Minister has now requested the Pensions Council to prioritise this piece of work and in advance of progressing the legislation required to underpin the AE system later this year.

It should be noted that the investment approach for the AE system that has been agreed to by Government will see most participants placed in a default fund, which will be based on a life-cycle investment strategy using a pooled contribution and returns approach. This investment approach, as set out in the General Scheme/Heads of a Bill, is based on objective research and robust evidence in terms of real-life outcomes. The design has also been informed by international experts provided through the European Commission’s Technical Support Instrument, which assists EU Member States implementing administrative and institutional reforms.

I hope this clarifies the matter for the Deputy.