Written answers
Tuesday, 30 September 2025
Department of Employment Affairs and Social Protection
Pension Provisions
Barry Ward (Dún Laoghaire, Fine Gael)
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666. To ask the Minister for Employment Affairs and Social Protection the steps he will take to ensure that workers subject to auto-enrolment for pensions will be entitled to make decisions about where their pension fund is invested; if there are ethical investment protocols; if workers will get to set the parameters of the way in which the investment is applied; and if he will make a statement on the matter. [52154/25]
Barry Ward (Dún Laoghaire, Fine Gael)
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667. To ask the Minister for Employment Affairs and Social Protection if he will ensure there is not an additional cost on charities from the pension auto-enrolment policy; and if he will make a statement on the matter. [52155/25]
Barry Ward (Dún Laoghaire, Fine Gael)
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668. To ask the Minister for Employment Affairs and Social Protection if he will commit to safeguarding funding from central Government for charitable organisations and registered charities in relation to costs associated with the pension auto-enrolment scheme; and if he will make a statement on the matter. [52156/25]
Dara Calleary (Mayo, Fianna Fail)
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I propose to take Questions Nos. 666 to 668, inclusive, together.
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 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.
With regard to charitable organisations, employees of such organisations may be auto enrolled provided they meet eligibility requirements or such employees may opt in if that is not the case and they are not already contributing to a pension through that employment. Therefore, such organisations may face additional costs due to AE. However, it is important to note that AE will be a transformative scheme for many workers in Ireland who can now be sure that they will have some additional security in retirement above and beyond the State Pension. It would not be fair to the employees of charitable organisations if they were excluded from this landmark reform.
It should also be noted that my Department has been engaging with employers, including those in the community and voluntary sector, since the release of the AE 'strawman' public consultation in 2018. Its impending implementation has also been well flagged since the publication of the previous Programme for Government in 2020. Employers have been given a substantial lead-in period to budget appropriately for its introduction, including through budget negotiation with a sponsor where appropriate.
Finally, it is worth mentioning that the design of the AE system provides for phasing in of the contribution rates over a decade, starting at a very low 1.5% of gross earnings for the first three years. For community and voluntary organisations (and employers more generally), this approach gives very clear certainty as to the rates that will be applicable so as to facilitate the gradual absorption of these labour costs.
I hope this clarifies matters for the Deputy.
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