Ken O'Flynn (Cork North-Central, Independent Ireland Party)
Link to this: Individually | In context | Oireachtas source

298. To ask the Minister for Employment Affairs and Social Protection the projections made regarding the sustainability of the State pension system given demographic trends as of September 2025; the funding gap projected over the next decade; and the reforms or measures being considered to ensure long-term security for current and future pensioners. [49455/25]

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

My Department assesses all factors relating to the State pension system and its sustainability through Actuarial Reviews of the Social Insurance Fund - from which the State pension is paid. An Actuarial Review must be conducted every five years. The last Actuarial Review was published in March 2023. The purpose of the review is to determine the extent to which the Fund may be expected, in the longer term, to meet the demands in respect of payment of all benefits, including State pension payments. The review takes account of the adequacy or otherwise of contributions to support such benefits and payments, as well as other matters relevant to the current and future financial condition of the Fund.

A consistent finding of the Actuarial Reviews is that the Fund will experience significant long term sustainability challenges. The Fund is projected to register annual surpluses up to the mid-2030s with an accumulated surplus of over €21 billion by 2035, at which time it would return to an initial annual small deficit, increasing markedly thereafter.

The Actuarial Review found that, in the absence of any action to tackle the shortfalls, the excess of expenditure over income of the Fund will increase significantly over the medium to long term with an accumulated deficit of €500 billion by 2076. This is mainly driven by the changing demographics, particularly the ageing of our population and the decreasing pensioner support ratio (the ratio between the number of older people and the number of working age people).

The previous Government established the Pensions Commission in November 2020 to examine the sustainability of the State Pension system and the Social Insurance Fund in light of the projected demographic changes. The Commission's Report, which was published in October 2021, took account of an assessment of various analyses of population, labour force and expenditure projections and set out recommendations to address the sustainability of the State pension system.

In order to address the future sustainability of the Social Insurance Fund, the then Government decided not to increase the State pension age but instead to implement a series of gradual and incremental increases in PRSI rates across all three contributors to the Social Insurance Fund - employees, employers and the self-employed. These increases total 0.7 percentage points between 2024 and 2028, with further increases to be considered, based on the most up-to-date data available from the next Actuarial Review of the Fund.

I trust this clarifies the matter for the Deputy.

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
Link to this: Individually | In context | Oireachtas source

299. To ask the Minister for Employment Affairs and Social Protection the implementation status and timeline of State auto-enrolment, in light of CCPC research indicating that 26 percent of Irish adults have no retirement plan; to provide year-on-year trend data since 2023; and to outline funded measures for financial literacy and default fund protections to reduce under-saving risk. [49495/25]

Dara Calleary (Mayo, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

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 as My Future Fund - will commence from 1 January 2026.

My Future Fund will automatically enroll all employees, aged between 23 and 60 years of age, who are earning €20,000 or more per year (across all employments), and who are not actively contributing to a supplementary pension scheme through their employer's payroll. It is estimated that approximately three-quarters of a million people will be automatically enrolled when the scheme launches on this basis. Those who fall outside the age and earnings threshold - in other words, those aged between 18 and 22 or between 60 and 66, or who earn below €20,000 - will be able to join My Future Fund by voluntarily opting in.

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. Specific contribution rates, which are universally applied, are set out in the Automatic Enrolment Retirement Savings System Act 2024. Contributions collected will then be invested with participants offered three savings options to choose at higher, medium and lower risk levels. A default investment strategy will be available for those who prefer not to choose. Finally, drawdown will be aligned with the State Pension age of 66.

Implementation of 'My Future Fund' is well underway. Most recently I announced the names of several members of the Board and the Chief Executive Officer of the National Automatic Enrolment Retirement Savings Authority (NAERSA), which is being established under the aegis of my Department to run the new scheme.

In addition, great progress has been made across several workstreams with multiple stakeholders to administer the system, to integrate with Revenue and individual payroll systems in determining eligibility and calculating contributions, to transfer contributions for investment, and to provide employee and employer access to services digitally.

Parallel to these workstreams, a three-phased communications strategy continues to be rolled out, with the current focus being on awareness raising with employers. Thousands of employers and related professionals in HR and payroll have been directly reached through webinars, conferences and in person stakeholder meetings in recent months. The second phase of the strategy commenced this summer with the launch of an advertising campaign on multiple media platforms. Additional campaigns targeted at employers and employees will be run before and after the launch in January 2026.

Neither my Department nor NAERSA has a specific statutory role in respect of financial literacy as that is more properly a function of the Competition and Consumer Protection Commission (CCPC). However, Section 9 of the Automatic Enrolment Retirement Savings Act 2024 requires NAERSA to undertake or participate in research which it considers may help promote retirement savings and public awareness of them. Accordingly, it will be a matter for the CEO and Board of NAERSA to decide on these matters over time.

I hope this clarifies matters for the Deputy.