Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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125. To ask the Minister for Employment Affairs and Social Protection to outline, in relation to the forecasts underpinning the forthcoming auto-enrolment scheme, the number of contributors he expects in each €10,000 income bracket from €20,000 up to €100,000, both in absolute numbers and as a percentage of all contributors; and if he will make a statement on the matter. [34649/25]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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126. To ask the Minister for Employment Affairs and Social Protection to outline, in relation to the forecasts supporting the forthcoming auto-enrolment scheme, the number of contributors expected to be liable for the higher 40% income tax rate, both in absolute numbers and as a percentage of all contributors; and if he will make a statement on the matter. [34650/25]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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127. To ask the Minister for Employment Affairs and Social Protection if contributors to the auto-enrolment scheme who are liable for the 40% higher income tax rate will be informed, either before or during enrolment, that the State incentive on their contributions would be doubled if they were to join a private pension scheme instead; and if he will make a statement on the matter. [34651/25]

Dara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos. 125, 126 and 127 together.

The Programme for Government contains a commitment to introduce the Automatic Enrolment (AE) Retirement Savings System. The legislative basis for implementing the new system was enacted last July. The aim of introducing AE is to address the pension coverage gap that exists in Ireland and to provide workers with greater comfort and security regarding their retirement savings. I recently announced the system, to be known by its brand name, 'My Future Fund', will commence from 1st January 2026.

It has long been recognised that supplementary pension coverage in Ireland among private sector workers is too low. It is estimated that just one-in-three private sector workers are actively contributing to occupational or private pension schemes. This may lead to these workers being reliant solely on the State Pension in retirement, which may in turn result in an unwanted reduction in their living standards.

In order to address this challenge, My Future Fund will see a transition from the current voluntary system to one which will, subject to certain parameters, automatically enrol employees into a quality assured retirement savings system. The saver will maintain some freedom of choice to opt-out.

While current occupational and private pension savings arrangements financially incentivise participation through tax relief on contributions at the participant's appliable income tax rate, the AE system will instead use a direct State top-up contribution. This top-up contribution will be applied equally to each participant at a rate of €1 for each €3 contributed by them, and is the equivalent of 25% tax relief.

The State top-up approach makes the auto-enrolment system highly equitable. Whether it represents a higher or lower financial incentive for a participant will be dependent upon their individual circumstances.

It cannot be said that My Future Fund will be less beneficial to a worker who pays tax at 40%. After all, anybody who will be auto-enrolled is not in a pension scheme and consequently is not receiving any benefit at present. In addition, to simply compare the state incentivisation aspect alone could give a misleading understanding of benefit to individuals. It is really important to note that other factors such as the applicable contribution rates, the income base on which contributions are calculated, tax relief, ancilliary benefits, administrative and fund charges, investment returns, employer support and other terms and conditions of a pension scheme all have a considerable bearing on the overall value of the scheme to its participants. In that context, My Future Fund will provide very significant benefit to all participants of the scheme regardless of their tax rate.

To support understanding of how the system works, the Department is currently running a communications campaign to inform both employers and employees about auto-enrolment, including how the State incentive differs from tax relief on private pensions. This campaign will intensify over the coming months to the launch of the scheme from 1 January 2026.

While the very specific and stratified data that the Deputy is seeking is not yet available, a minority of around 25% of the more than 800,000 employees that may be eligible for enrolment into My Future Fund are likely to be paying income tax at the higher rate, according to ESRI analysis.

I trust this clarifies matters for the Deputy.

Catherine Connolly (Galway West, Independent)
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128. To ask the Minister for Employment Affairs and Social Protection if employer contributions to auto enrolment pension accounts will be exempt from PRSI; and if he will make a statement on the matter. [34669/25]

Dara Calleary (Mayo, Fianna Fail)
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The Programme for Government contains a commitment to introduce the Automatic Enrolment (AE) Retirement Savings System. The legislative basis for implementing the new system was enacted last July. The aim of introducing AE is to address the pension coverage gap that exists in Ireland and to provide workers with greater comfort and security regarding their retirement savings. I recently announced the system, to be known by its brand name, 'My Future Fund', will commence from 1st January 2026.

Contributions into the retirement savings system will be made by the employee, the employer and the State. Calculated on the basis of the employee’s gross earnings, employee contributions will start at 1.5% for Years 1 to 3, to be matched by their employer. This will rise to 3% each in Years 4 to 6, and to 4.5% each in Years 7 to 9. From Year 10 onwards the maximum contribution rate of 6% from the employer and 6% from the employee will be applied. A direct State top-up will be contributed to participants' funds at the rate of €1 for every €3 the employee contributes.

Auto-enrolment contributions are calculated on the basis of the employee's gross pay and are deducted from the employee's net pay. Employer contributions to their employees' My Future Fund accounts are not treated as reckonable earnings for social insurance purposes and are therefore exempt from PRSI.

I hope this clarifies the matter for the Deputy.