Roderic O'Gorman (Dublin West, Green Party)
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84. To ask the Minister for Employment Affairs and Social Protection if the planned auto-enrolment retirement savings scheme will be designed to favour environmental and socially ethical investment pathways; if he will ensure that participants will have the ability to choose portfolios that reflect personal values, including sustainability and social impact; if the scheme will offer full public transparency on asset classes, sectors, and companies involved in each fund; and if he will consider the introduction of a dedicated green investment pathway as a core, not optional, feature of the system. [50649/25]

Dara Calleary (Mayo, Fianna Fail)
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The introduction of a pensions auto-enrolment (AE) system is a Programme for Government commitment, and one of my key priorities as Minister for Social Protection. The aim of introducing an AE system is to address the pension coverage gap that exists in Ireland, and to help provide for better retirement incomes for workers. The new system will be called 'My Future Fund' and it will launch from 1st January 2026.

The investment approach and rules are set out clearly at Part 4 of the Automatic Enrolment Retirement Savings System Act 2024.

In line with that, there will be three investment strategies - lower, medium and higher risk - available initially to participants. The investment objective of each these funds will be defined by reference to a specific ESMA (European Securities and Markets Authority) rating or an acceptable alternative scale and methodology used for the purpose of indicating the level of risk applicable.

All participants will initially be brought into the default strategy, which will involve moving their invested assets from the higher risk strategy to the medium risk strategy and then to the lower risk strategy, according to a defined age-driven timeline set out in Section 70 of the Automatic Enrolment Retirement Savings System Act 2024. The participants are placed in the higher risk strategy when the time before the participant reaches the State pension age of 66 years is more than 15 years. A participant is then moved to the medium risk strategy when the time before the participant reaches State pension age is 15 years or less but more than 5 years. Alternatively, they may be placed here from the start if they already satisfy the age requirements. Finally, they are moved to the lower risk strategy when the time before the participant reaches State pension age is 5 years or less. Again, alternatively, they may be placed here from the start if they already satisfy the age requirements. Most participants are expected to stay in the default strategy. However, they will have the option of choosing any one of the three funds at any time.

While all investments must be made in accordance with the prudent person rule, and in the best long term interests of the participants in the scheme, each of the investment strategies will have specific ESG (Environmental, Social and Governance) requirements, as set out in Sections 74 and 75 of the Act. Section 74 requires investment management providers to take into account the long-term impact of investment decisions on environmental, social and governance factors. Section 75 is also of particular note as it provides for a number of provisions that must be included in contracts with investment management providers relating to environmental and other matters. These include that investment management service providers must:

• make provision in their risk management system to take account of risks arising from environmental, social and governance factors;
• conduct, at intervals of not more than 3 years, an assessment of the risks arising from environmental, social and governance factors, and report to the National Automatic Enrolment Retirement Savings Authority on the assessment; and
• prepare, and from time to time revise, a statement describing how considerations arising from environmental, social and governance factors affect its investment decisions.