Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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1800. To ask the Minister for Employment Affairs and Social Protection if employers will be allowed to enrol higher rate taxpayers in a company pension scheme and other employees in My Future Fund; if so, if employees who move from My Future Fund to a company pension scheme (or vice versa) on a change in tax status, be allowed to transfer accrued funds to the new scheme; and if he will make a statement on the matter. [41890/25]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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1801. To ask the Minister for Employment Affairs and Social Protection further to Parliamentary Question 127 of 19 June 2025, the number of the estimated 200,000 higher rate taxpayers eligible for enrolment into My Future Fund that are projected to join the scheme when it goes live on 1 January 2026, (details supplied); and if he will make a statement on the matter. [41891/25]

Dara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos. 1800 and 1801 together.

The Programme for Government contains a commitment to introduce the Automatic Enrolment (AE) Retirement Savings System. 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 income. The new system, to be known by its brand name, 'My Future Fund', will commence from 1st January 2026.

Contributions into 'My Future Fund' will be made by the employee and matched by their employer. In addition, the State will top-up participants' funds at the rate of €1 for every €3 that the employee contributes, which is equivalent to 25% tax relief. ESRI analysis of the AE target population suggests that around 25 per cent of those that will be automatically enrolled will be employees that come within the scope of the higher income tax band.

The difference in financial incentives between the State top-up approach and the current tax-relief system for pension contributions has been considered in depth. Whether AE or tax-relief is preferable for any given worker will in fact depend on a rounded consideration of their individual circumstances. It would be overly simplistic to suggest that My Future Fund is automatically less beneficial to those who pay tax at 40%; just as it would be overly simplistic to say that My Future Fund is automatically more beneficial to those who pay tax at 20% or those who are outside the income tax bracket altogether.

Firstly, it is important to note that anyone who would be eligible to be auto-enrolled when the system goes live is not participating in any pension arrangement through their payroll. Accordingly, they don't have access to any incentive, regardless of its type or value. Secondly, it is important to note that the State top-up approach is far simpler for people to understand as it operates similarly to the SSIA approach adopted in the past whereas tax relief is difficult for many to grasp. Thirdly, the State top-up approach has the significant advantage of making the auto-enrolment system equitable across participants - the State incentives every euro saved by exactly the same amount regardless of who saves it. Finally, it simply isn't the case that people who receive tax relief at the higher rate would be universally better of in an occupational pension scheme rather than in AE as a range of other factors other than tax relief such as contribution rates, the income base on which contributions are calculated (whether gross or base income), ancillary benefits, administrative and investment charges, investment returns, and whether the employer is making a supporting contribution, will all have a bearing on the value of a scheme to its participants. The approximately 750,000 employees who may be auto-enrolled currently have no active supplementary pension coverage facilitated by their employer. In that sense, My Future Fund will be of great benefit to a great many people.

My Department is currently rolling out an intensive communications campaign to inform both employers and employees about auto-enrolment. An information hub with several up to date resources has been created at www.gov.ie/autoenrolment. This will assist future participants and their employers to make an informed choice about their next steps.

There is nothing in the AE legislation to either prevent or encourage employers to act in any particular way regarding their own company pension arrangements. Individual employers are best placed to determine which arrangement meets both theirs and their employees' needs. This may mean encouraging employees into their existing occupational or other supplementary pension scheme, or it may mean availing of the arrangements of 'My Future Fund', or both.

The transfer of savings into or out of My Future Fund will not be facilitated at the outset as the focus is on getting the system up and running for the approximately 750,000 people without pension coverage. In line with 'The Design Principles for Ireland’s Automatic Enrolment Retirement Savings System' document that was published in 2022, this may be considered as part of the evolution of the scheme once it is up and running.