Written answers
Tuesday, 1 July 2025
Department of Employment Affairs and Social Protection
Pension Provisions
Catherine Connolly (Galway West, Independent)
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536. To ask the Minister for Employment Affairs and Social Protection further to Parliamentary Question No 150 of 19 June 2025, the reason for the difference between the €794 million estimate for the year-10 Exchequer contribution to auto-enrolment provided in that reply and the €539 million estimate for the year-10 Exchequer contribution to auto-enrolment provided in the regulatory impact assessment accompanying that legislation (details supplied); and if he will make a statement on the matter. [35871/25]
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.
The difference in the cost of the State top-up between that contained in the regulatory impact assessment (RIA), which was conducted in 2022, and the latest estimate provided in Parliamentary Question No 150 of 19 June 2025 is due to a range of factors, including the value of base salaries used to estimate the cost in Year 1, variations in wage inflation over the ten year period to arrive at the cost in Year 10, and refinement in the projected numbers of the target population.
I trust that this clarifies the matter for the Deputy.
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