I remind Members this debate will conclude at 9 p.m. if not previously concluded. I welcome the Minister for Social Protection, Deputy Humphreys, to the House, congratulate her and say we were glad she did not fall into the water in Monaghan this morning. She looked well on the news on TV3.
Automatic Enrolment Retirement Savings System Bill 2024: Committee and Remaining Stages
SECTION 1
I move amendment No. 1:
In page 9, line 20, after “days” to insert “not earlier than 30th June 2025 as may be specified by resolution adopted by Dáil Éireann”.
I move this amendment in my name and that of the other Senators. This amendment is solely for one purpose, namely to make an appeal to the Minister to create sufficient time to allow the Economic and Social Research Institute or some other body to evaluate the alternative method of dealing with auto-enrolment put forward by Mr. Colm Fagan - which we spoke about on Second Stage - and by Mr. Paul Kenny, the former head of the pensions board, to allow an analysis as to whether it would, in fact, give more money to pensioners who are the subject matters of auto-enrolment over the years, as has been claimed.
The simple fact is that workers' pensions could be doubled by replacing the outdated investment approach proposed in the Bill with one designed especially for auto-enrolment. The Bill envisages separate investment strategies and risk management profiles for each individual. The point was made that this is grossly inefficient, sub-optimal in investment terms and would be difficult to administer. The UK experience has demonstrated this with a similar approach introduced more than a decade ago. I suggest the method of dealing with separate accounts or risk evaluations for each individual is sub-optimal and I ask that the Minister take one last opportunity to seek the advice of a totally independent, outside body - not the pensions board - to deal with this and to evaluate whether Mr. Fagan's proposal makes better sense and will be better for people who are the subject of auto-enrolment.
Deputy Richard Bruton, who is a person of wisdom, experience and also ministerial experience, made this point during the Second Stage debate on the Bill in Dail Éireann.
The question of whether it makes sense to have the pension funds split into individual ... accounts [each] with their own risk management profiles and investment strategies has been raised. I ... [have been] quite persuaded by the argument that, for a fund like that proposed, which is to be managed centrally by the auto-enrolment board, there is a strong case for the policy to maximise the return to the fund in which people would own units.
It would be a pity if everybody involved thinks that Mr. Fagan's alternative approach is the correct one that would yield higher pensions and better results for those who are the subject of auto-enrolment. The only thing I am concerned about doing is to appeal to the Minister to allow one more opportunity for somebody else to evaluate that possibility before this Bill commences. The idea of putting off the Bill's commencement date, as the amendment suggests, until that date in 2025 is to give the Minister the opportunity to send the matter to the Economic and Social Research Institute and ask for a totally disinterested and unbiased analysis as to whether the Fagan-Kenny approach would be preferable to the approach adopted on a conservative basis in the Bill. If so, this gives the Minister - even if this Bill is passed in its present form with this amendment - the opportunity to put down alternative amendments by way of a second Bill to ensure the result for pensioners is optimal and not sub-optimal.
I thank Senator McDowell for his amendment. I do not propose to accept it because a consequence of this amendment would be further delay to this transformational societal initiative. This has been flagged for nearly 30 years and implementation is well overdue. I believe it is in the best interests of future automatic enrolment, AE, participants to have the scheme up and running as soon as possible.
We have discussed it a lot, considered it and designed it. It is time now to just get on with it. Somebody always has a reason not to do something. We need to move on with this proposal.
There is a misunderstanding regarding the investment. The money is pooled for investment. All the members’ money will be pooled into three different pots – low, medium and high risk - and a default pot. It is not separate investments for each person. It will all go into whichever pot they choose, depending on their age and depending on how they are with risk. They will be able to make that decision. It is all pooled into one of four pots.
The Pensions Council is an independent body of experts drawn from the legal and financial world. It is their role to advise me on what they understand to be the best way forward in providing a pensions landscape in Ireland that works best for the consumer. While the Pensions Council has acknowledged that the Fagan proposal is an interesting idea, it ultimately could not recommend it to me as a better alternative to the already agreed auto-enrolment design. The Senator will appreciate that, as Minister, I cannot foist an untested and unproven theory on automatic enrolment participants. I cannot and should not be taking risks with people’s money on an unproven approach and against the advice of the Pensions Council.
For those reasons, I cannot recommend it to the House as an approach. I am not in a position to accept this amendment.
Arising out of the Minister’s remarks, nobody serious has said the Fagan-Kenny approach is defective or pointed out some defect in it. They have all said it is interesting, it could be so and perhaps it would yield greater results. Nobody has said the reason it is wrong or the reason we should avoid it. The only argument I have heard offered against its adoption is that it has not been implemented elsewhere and it is, in that sense, untested.
Without my amendment, when would it be proposed to commence the Bill, if enacted, under section 1(2), as unamended? If the Minister is in a position to say the Bill, if enacted, will be amended almost immediately, I can see some force in her argument that she wants to get on with it. However, if it will take time to get it up and running and put in place all the necessary arrangements, I do not see that the arguments the Minister made about further delay are all that valid. Some space should be created by this House and by Dáil Éireann to look for a further evaluation.
The Minister said the Pensions Council is independent, but it has not actually said at any stage that it finds any particular fault with the Fagan-Kenny approach. Nobody said the Fagan-Kenny approach, if adopted, would result in worse outcomes for pensioners under the scheme. All the indications I, as well as Deputy Bruton in the Dáil and others, have seen is that what the Minister is doing is conservative, suboptimal and avoiding an opportunity to do something that would significantly increase the real return on pension contributions for people subject to auto-enrolment.
In any event, how quickly will this be brought into operation? All I am effectively asking for is a 12-month space. Will the Minister bring it in before Christmas, after Christmas or before Easter? Will this be operational before this time 12 months? Is this an argument that is redundant because the Bill will not be in full operation before the date specified in my amendment?
Senator McDowell qualified what he said. Nobody said it is wrong, but it has not been tested, which is the problem. We are looking into the future.
I agree with the Minister in this case. We need to get this up and running. It has been going on for 30 years. I hope, as Senator McDowell said, that the Minister will get on with this Bill immediately. In some cases, many people may have only five or ten years – I do not know what, but the minimum number of years a person has left - to get into the scheme. Is it five years or ten years? If it is ten years and we have to wait another year to introduce it, that is one year gone out of the ten; it is 10% of the time gone. Perhaps at a future date, for example, five or six years down the road, the Minister could look at a different scheme, such as the Fagan scheme. I hope, as Senator McDowell said, the Minister would get on with this straight away. If it is going to be delayed, this other option could be looked at. However, I hope the Minister will initiate this straight away.
I thank the Minister for coming into the House. There are many amendments to get through but, ultimately, I agree with my colleague and the Minister that we have to get on with it. Many employees are waiting for this to happen. They do not know whether to start their own private pension scheme or whether to wait for the auto-enrolment scheme. People are watching this debate and hoping it will pass through this House speedily. We have waited too long for it to happen. I hope we do not see any delays today. I look forward to the Committee Stage debate today.
I agree with Senators Burke and Ardagh. There are many people, as we speak, waiting for this system to get up and running, especially the 800,000 people who do not have any private pension cover apart from the State pension. That is particularly low-paid workers and women. As I said, it is important we move on as quickly as we can. Contracts are already in place and we will be signing up to them in a very short time. The process is moving on and I cannot afford to stall it. For that reason, I do not propose that we wait any longer in implementing this legislation and the plan to have auto-enrolment up and running. It is expected we will have it in place possibly in January 2025. That is the plan. It is getting closer and I do not want to delay it.
I have asked the Pensions Council to look at it. Looking at the membership of the Pensions Council, there are many experts in that field. They told me they could not recommend that I go down that route. The Senator must appreciate that I cannot risk the members’ money. I worked in financial institutions for many years and the one thing is that you must show prudence and make sure you do not risk it. We cannot do otherwise. I always heard this adage and it always rang through at the end of the day: if you want to get a higher return, you take a higher risk. That is just a fact of life. That is my view. However, the Pensions Council clearly told to me we should proceed with the proposal as outlined, as we plan to do.
I thank the Minister for her response and I acknowledge the response of my fellow Senators. In view of that response, I seek the freedom of the House to withdraw my amendment.
Amendment, by leave, withdrawn.
Section 1 agreed to.
SECTION 2
Amendments Nos. 2, 5, 6, 9, 28, 33, 35, 36, 40 to 49, inclusive, 52, 54 to 63, inclusive, 65, 71 to 106, inclusive, 108, 119, and 122 to 127, inclusive, are related and may be discussed together by agreement. Is that agreed? Agreed.
Government amendment No. 2:
In page 10, to delete line 24 and substitute the following:
“ “prescribe” means prescribe by regulations made by the Minister under this Act;”.
Senators will notice that I am bringing forward several dozen Government amendments today. The key point I would make about the Government amendments is that without exception they are all of a technical nature and do not in any way relate to new or changed policy. This is the first point that applies to every amendment I will propose today. The second point is that the vast majority of the amendments have been proposed by the drafters in the Office of the Parliamentary Counsel who, having had some time since the publication of the Bill to review it and to conduct another very thorough quality assurance process on it, have found a few things they thought could be improved. These amendments have no material impact on the provisions of the Bill and I would ask Senators to please support them. This is the first group of amendments that are of a technical nature and are being brought forward for the purposes of drafting clarity and cohesion.
Amendment agreed to.
Section 2, as amended, agreed to.
Sections 3 to 5, inclusive, agreed to.
NEW SECTIONS
Amendments Nos. 3 and 4 are related and may be discussed by agreement. Is that agreed? Agreed.
I move amendment No. 3:
In page 11, between lines 24 and 25, to insert the following:
“Report on care
6. The Minister shall, within six months of the passing of this Act, lay a report before both Houses of the Oireachtas outlining the measures taken to ensure that those who engage in care work outside the labour market are supported to ensure equitable access to, and outcomes from, under the scheme.”.
Amendment No. 3 proposes to insert a new section in the Bill to require the Minister, within six months of the passing of this Act, to lay a report before both Houses of the Oireachtas outlining the measures taken to ensure those who engage in care work outside the labour market are supported to ensure equitable access to, and outcomes from or under, the scheme. At the moment it seems that those engaging in care work will not be covered and will not benefit significantly from the scheme. This is really disappointing. We know from Oxfam that, globally, women and girls take on more than three quarters of unpaid care work and make up two thirds of the paid care workforce. When valued at the minimum wage, the 12.5 billion hours of unpaid care work that take place represent a contribution to the global economy of $10.8 trillion a year, more than three times the value of the global tech industry. More directly here in Ireland we have had problems with our previous pension systems and schemes. It has been one of the huge gaps and one of the obstacles. A problem in our pension system at each level has been the failure to properly reflect gender equality issues and to properly reflect care. It is a significant obstacle in the State pension. We are very aware of how many women end up on the significantly reduced rate pension because the periods of time in which they engaged in care were not recognised. While there was a shift in the scheme that increased the number of care credits that may be recognised, the goalposts were moved out, so you went from having ten years recognised to 20 years recognised but under a new system that requires a 40-year contributory record. We did not, in effect, move significantly in terms of the State pension to address the gaps experienced by those delivering care because we increased their capacity but moved the goalposts.
The analysis of private pension tax relief in the State has shown it predominantly benefits men and those on higher incomes. The Minister spoke about the fact that very few people have private pensions in the State. Questions must therefore be asked because the tool we have mainly used has not delivered for us. This is why something like the auto-enrolment scheme is now having to be produced. The scheme of private pension tax relief has primarily benefited high earners and men. It fails from a gender perspective and yet it costs a huge amount .
This comes into my amendment No. 4, which asks that there would be a report before the Houses of the Oireachtas looking at the introduction of a universal pension and that would include detailed research and modelling of the potential introduction of a universal pension, including cost-benefit analysis of such a model as compared with current expenditure on contributory pension, non-contributory pension, qualified adult increases, tax relief on private pensions, and the automatic enrolment retirement savings schemes. We have this plethora of measures for pensions, including now this new automatic enrolment retirement savings scheme, and there is the qualified adult increase, contributory and non-contributory and so on. What would it look like if we were to have a universal pension set at a proper and adequate level, ensuring cover and security for persons in the long term and for all of the people of the State, and if everybody in the State knew they would have an entitlement to a strong, decent and adequate pension? What would the cost be of that compared with what we spend on all of these other measures?
It is important to note that the problem with previous analyses on universal pensions, and indeed some of the work done by the Pensions Commission, was they did not address or look at the tax relief issue. There was a comparison and examination of what gets spent through the social protection system directly on pensions but what was not on the table for consideration was the removal of the private pension tax relief. It still does not seem to be on the table. It is not clear, and I would appreciate if perhaps the Minister would expand on this, whether, if we have the automatic enrolment scheme, which it is hoped will bring in a wider pool of employees to having private pensions, we are also going to look at changing the private pension tax relief system. At the moment it is stratified in a way that is designed to benefit higher earners more. It was even one of the recommendations for the State from the International Monetary Fund back at the time when we had a memorandum of understanding that it should be adjusted because it was seen as an inequitable policy . It was one of the few structural adjustments that did not take place.
We were told in the previous assessment of the cost of a universal pension that the cost would be approximately €3 billion per annum. It is notable, however, that this matches almost perfectly the €2.9 billion that is spent annually on private pension tax relief. The statistic behind this is that 70% of the benefit of this relief is found to be going to top earners, those on the higher incomes, who are predominantly men. A universal pension would largely address the issue of women and inequality in our pension system rather than individuals scrabbling to put together credits to see if they have enough and a huge number of individuals, and as we have seen, historically they tend to be women, finding themselves on a reduced rate pension because they do not meet a contributory threshold that is ever increasing. Will the Minister comment on that increase from 20 years to potentially 30 or 40 years? What is the timeline for that? Given a 30 or 40-year pension contributory requirement, I do not believe most people are going to meet that. A lot of people will fall short and we will see people on reduced rate pensions.
In that context, rather than putting the burden on the individual to try to navigate having a pension through this system, which is becoming more difficult to navigate and where the requirements are increasing all the time, imagine if the €3 billion we spend on private tax relief was spent on a universal pension. People could just have that security into their older age of knowing they would have an income they could rely on and it would not cost the State more than it currently spends on private pension tax relief, which tends to benefit higher earners who already have the capacity to use the private pension tax relief and who are more likely to already be benefiting from the measures. There is nothing to stop them from investing in a private pension scheme if that private pension scheme delivers returns for them.
However, the return such schemes deliver is predominantly tax relief. If they schemes are so lauded in terms of investment, they should offer returns that are meaningful for those who invest in them.
Amendment No. 4 packages many of these measures together. It asks that the auto-enrolment scheme, along with all the other measures, be assessed in terms of the cost benefit and what we get from it, what the State gets in terms of the population and people's guaranteed future versus what we would get from the universal pension. It is different from assessments that have taken place in the past in that it includes private pension tax relief. There was a major gap when the €3 billion big-ticket item was taken off the table when we discussed how to get value for money from what we spend on pensions.
When indicating whether she accepts my amendments, the Minister might outline her plans in respect of tracking gender equality. The issue that explicitly needs to be examined in the context of the latter is an analysis of what a universal pension system could look like versus the other schemes we have, including this scheme, in terms of addressing the gaps in income inequality and, in particular, gender inequality, financial security and independence for women. This relates to amendment No. 3 as well. It is the same issue in the context of care. When a large number of women in the State do not have adequate pensions in their own names, one of the problems is that this affects financial independence and financial security. It leaves many women in a position of extreme vulnerability and dependent on their partners in the context of their long-term security. That has serious implications of its own.
I hope the Minister will accept either amendment No. 3 or amendment No. 4, which both request that reports be laid before the houses. If she is not in a position to accept them, however, I hope she might be able to indicate what her plans are in regard to ensuring that the gap in terms of care will be addressed and that there will be an examination of the new auto-enrolment measures in terms of what they deliver in the context of gender and income equality. Are we going to avoid the mistakes that have been made with the contributory and non-contributory pensions whereby gender inequality was built into their design? That is reflected in the tax relief which has delivered gender inequality. What measures will ensure that we do not have yet another plank of our pension policy that fails to address the gender inequality gap relating to pensions?
I am disappointed with the contribution from Senator Higgins because the State makes a contribution to people's pensions. At the same time, the Senator is saying that we should remove the tax relief from small business owners and small self-employed people. These individuals are probably the biggest employers in the country. They are small employers but taken together, they represent one huge employer. Senator Higgins is advocating that we should take the tax relief away from those who employ people in circumstances where they have private pensions and avail of tax relief. I cannot support any of the amendments proposed by Senator Higgins.
I thank the Senator for bringing forward these amendments. Unfortunately, I do not propose to accept them. On the amendment in respect of a report on a universal pension, this issue does not come within the scope of the Bill. The national automatic enrolment retirement savings authority, NAERSA, will have no remit to consider such a proposal. In any event, a report is not necessary because this matter was considered and reported on by the Commission on Pensions as recently as 2021. The commission concluded that the cost of moving to a fully universal basic pension could potentially be an additional €2 billion to €3 billion depending on the design and that it would require fundamental changes right across the tax and social insurance systems as currently conceived. The commission also endorsed the early introduction of an automatic enrolment system to improve retirement income adequacy for future pensioners. Senator Burke is correct. Changing or removing tax relief on pensions would result in a considerable wage cut for middle-income workers. Tax relief is a tax policy matter and is not relevant to this Bill.
With regard to the second amendment, as carers are not employees and are not earning an income provided by an employer through a payroll facility, automatic enrolment will not apply to them during the initial implementation phase. However, it is envisaged that, as the automatic enrolment system matures, the new authority will examine the possibility of extending automatic enrolment to other cohorts of the population such as carers. I cannot support these amendments.
In regard to women, nearly 400,000 women will have access to a pension for the first time, supported by their employers and the State through automatic enrolment.
The Minister's answer points exactly to the problem which is that the Commission's examination explicitly excluded consideration of the tax relief. It is not necessarily even about removal but reform of the private pension tax relief, which is currently set at a marginal rate. This means that a higher earner gets 40% tax rate relief. Low-income earners only get 20% tax relief. Not surprisingly, it is mainly higher earners who benefit. The research literally states that 70% of higher earners benefit. The Minister is saying it could cost €2 billion to €3 billion. That is what we spend on private pension tax relief. The idea that we cannot talk about tax relief is not valid. We should be able to consider it and test it on the basis of a cost-benefit analysis. As stated, the idea of a universal pension was considered and it was found that it could potentially cost €2 billion to €3 billion. Questions were asked as to where we would get that money. However, there was an explicit exclusion whereby the commission was not allowed to talk about the giant, expensive elephant in the room, which is private pension tax relief. Private pension tax relief was off the table. Meanwhile there was a discussion about having to find €2 billion to €3 billion. It is literally right there.
As I pointed out, when we went through austerity, this was, as people may recall, one of the recommendations made by the troika. Many very harsh recommendations of the troika that should not have been implemented were implemented. This recommendation was not implemented, however. The troika stated that private pension tax relief should be standard rated, at 20% or 30% in order that all workers with private pensions and tax relief would benefit at the same level rather than higher earners, who are the least likely to be needy being advantaged.
The policy problem that the State faces is, as the Minister said, the fact that there are hundreds of thousands of workers who do not have access to secure pensions. The problem the State has there is a gender pension gap and a pension gap when it comes to those on low incomes. That is why we need an analysis of the big-ticket item. If the big gap relates to those on low incomes and women, is the €3 billion we are spending on private pension tax relief, which mainly goes to high-earning men, perhaps not the best use of money? It is not about whether it would be nice to give that tax relief. The question should be whether it is the best use of our resources. That is relevant because we have a new scheme coming in. The gender aspect matters. There is a real concern, particularly as women are more likely to be carers and carers do not benefit from the scheme, that we are literally about to make the same mistake again.
We are going to try yet another scheme in which there is a real risk that women will be disadvantaged and the pension gap could widen rather than narrow. This is why I am asking the Minister very robustly what plans exist to track the gender equality impact of this scheme. We cannot be complacent because our contributory pension system left the majority of women on a reduced rate pension, some of them with just €50 or €100 per week, and our private pension tax relief also disadvantaged women because they were more likely to be on a lower income rather than in the higher income bracket that benefited all the more. If we have made the gender inequality mistake with the two other big bits of our pension plan, surely trying to make sure we improve things should be front and centre. Could the Minister elaborate on what measures will be introduced to track the gender equality impact of this? I appreciate that there are a lot of women who may benefit from the scheme but what will that be in proportion to the number of men who will benefit from the scheme? Will it address the gap or will it just bring a few more people into a pension system but still leave that fundamental inequality cemented because care is the invisible piece yet again and care is not properly recognised yet again? The Minister mentioned that care may be considered down the line so what is the timeline for that? Could she elaborate on that?
I believe that automatic enrolment will address the pension gap. I believe it will make a significant difference. A total of 800,000 people who do not have other provision other than the State pension will now have a pension for their retirement. The Senator discussed the issue around tax relief at length. Tax relief is a tax policy matter and is not for this Bill.
It is a Government matter and this is a Government policy. It is a pension policy matter. The fact that we continually refuse to talk about the tax relief is a bad sign that it might not stand up. We are talking about the State and how we plan for the future of the population. In respect of constantly talking about tax relief and saying that the commission cannot talk about it - we could not talk about it today when we raised the issue in the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach - it seems that they do not want to talk about it in comparison to what we are spending on other aspects of pensions. The Minister is a Minister in a Government and we are addressing collective problems that not just the Government but all of us in Parliament want to address around ensuring a secure future for our population so if something is deeply relevant, it needs to be addressed at some point. It is regrettable that there is still an unwillingness because I believe everyone knows it will not stand up if the Minister looks at it besides giving a knee-jerk response of "I know someone who benefits from it" or "this is one that is useful to a lot of people". If the Government were to make the hard decisions that a Government must make about what is the best way to spend our money, it would see that this private pension tax relief looks pretty ropy. Instead, we are putting all the pressure everywhere else. We are trying to up the contributions from net 30 years to net 40 years. Everybody else is working around this elephant in the room. I do not apologise for raising it and will continue to raise it.
In some of my later amendments, I hope to touch on the gender equality issues again. I asked if there was a timeline around the issue of care and the Minister mentioned that it may be addressed at a later stage. Is there a timeline for when that might be addressed? I will come back in some of my later amendments on the question of gender equality. Besides the aspiration that it might be addressed by this measure, I would like to know what the indicators are and how it is going to tracked. If a gender equality issue emerges from the scheme, what are the ways it might be addressed? I may come back to some of those issues in some of my later amendments. If the Minister could add something on the timeline for care, that would be really useful. The Minister indicated that there are plans in the future to consider incorporating care and I would like to know what the timeline might be on that.
Before I call on the Minister, I welcome Councillor Avril Cronin. I congratulate her on her recent re-election to Wicklow County Council. I also welcome her cousins Moss Grace and Sheila Grace. They are very welcome to Leinster House. I hope Councillor Cronin treats them royally here this evening. Is the amendment being pressed?
Amendment put and declared lost.
I move amendment No. 4:
In page 11, between lines 24 and 25, to insert the following:
“Report on universal pension
6. The Minister shall, within six months of the passing of this Act, lay a report before both Houses of the Oireachtas on the introduction of a universal pension, which shall include—
(a) detailed research and modelling on the potential introduction of a universal pension, including a cost benefit analysis of such a model as compared to current expenditures on contributory pensions, non-contributory pensions, qualified adult increases, tax relief on private pensions and the automatic enrolment retirement savings system,
(b) an analysis of the potential impact in terms of income equality, and
(c) an analysis of the potential impact in terms of gender equality, and financial security and independence for women.”.
Amendment put and declared lost.
Sections 6 to 8, inclusive, agreed to.
SECTION 9
Government amendment No. 5:
In page 13, line 7, to delete “Chapter 1” and substitute “Chapter 2”.
Amendment agreed to.
Government amendment No. 6:
In page 13, line 8, to delete “Chapter 2” and substitute “Chapter 3”.
Amendment agreed to.
Amendments Nos. 7 and 8 are related and may be discussed together by agreement
I move amendment No. 7:
In page 13, lines 13 and 14, to delete “with investment management providers”.
Amendment No. 7 seeks to raise the fact that the practice of using external asset managers for State investments has left us open to portfolios where there may be significant human rights and environmental risks. Amendment No. 8 seeks to amend section 9(2)(a)(ii) of the Bill, which currently provides that the authority shall perform its functions in the way that appears to it best calculated to provide a high-quality retirement savings system that is digital by default. My amendment would insert that it must also be an accessible system. It is very important that accessibility is considered and reflected in the design. When we look to the digital divide in Ireland, we know that according to EU figures, almost 40% of the population struggle with basic online and digital activities. Despite all the large tech companies being based here, Ireland has a very high level of digital illiteracy so it is very important that we ensure there is accessibility and we do not by having digital by default end up with a system whereby large swathes of the population who may be those lower earners we hope will benefit from the scheme find themselves disadvantaged.
Regarding amendment No. 7, my concerns, which I have raised with regard to other funds, are around the use of external asset managers. It makes it more difficult to track some of the human rights and equality issues that arise from our investments. I previously highlighted issues relating to cluster munitions, fossil fuel divestment and various other ethical measures. When we use external asset managers, we are one step removed in terms of tracking and ensuring that public moneys or investments that contain large amounts of public money are not contributing to portfolios that carry risks. Regarding the environmental, social and governance, ESG, measures, which constitute one piece, and the legal measures relating to things like cluster munitions and fossil fuel divestment legislation, which are legal obligations of the State, it would be useful to know what the plans are to consider not using external asset managers, which would be my preference, or if that is not considered, what measures exist to ensure they avoid any risk to the State from ESG breaches of international and national law. Amendment No. 8 concerns the issue of accessibility.
I do not propose to accept these amendments. Amendment No. 7 would prevent the authority from arranging for the investment of contributions with procured commercial investment management providers. Part 4 of the Bill provides considerable detail about how the new authority will engage with external investment management providers with a range of appropriate safeguards to ensure that participants' funds are protected and are invested well.
It is not feasible that the new authority would not contract with commercial providers for this service or that it would undertake this work itself.
On the second amendment, it is already in the Bill. Section 103 of the Bill as it stands provides for communications and services other than online. Therefore the legislation already qualifies the digital-by-default manner in which services are delivered along the lines suggested by the Senator.
Amendment put and declared lost.
I move amendment No. 8:
In page 13, line 28, after “digital” to insert “and accessible”.
I will withdraw the amendment in light of the Minister’s elaboration.
Amendment, by leave, withdrawn.
Section 9, as amended, agreed to.
SECTION 10
Government amendment No. 9:
In page 14, to delete line 22 and substitute “subsection (2).”.
Amendment agreed to.
Section 10, as amended, agreed to.
SECTION 11
Amendments 10 to 15, inclusive, are related and may be discussed together by agreement. Amendment No. 13 is a physical alternative to amendment No. 12.
I move amendment No. 10:
In page 15, line 1, after “governance,” to insert “gender equality,”
Amendment No. 10 seeks to amend section 11 around the membership of the authority board by providing that one of the competencies which the Minister would seek is in gender equality. In my earlier contribution, I outlined how this is the part the State has got wrong. I saw it in great detail when, prior to being a Senator, I worked with Older and Bolder, the alliance of all the age organisations in Ireland. We held round tables about pension policy up and down the country, from Donegal to Kerry and to Waterford. Again and again, we encountered huge issues, particularly for women in relation to reduced rate pensions. The same issues, with a deeper analysis of some of the systemic issues, were also part of my work with the National Women’s Council of Ireland. The State has a really poor record around gender equality and pensions. I have outlined some of the issues. Even when the top level state pension was not cut during austerity, the bands were changed so that those who were on reduced rate pensions, predominantly women, did see a cut in their pensions during austerity, a very harsh cut, because the bands in terms of their contributions pushed them further down into a reduced rate of pension. I am deeply concerned that the same thing will happen again if we see the overall contributory requirement increased. On the proposals relating to care credits, while the care credit increased the gap it was trying to fill also widened in terms of the contributory requirement. We got it wrong and we continue to get it wrong on the State pension. I mentioned, and will not elaborate further, how we got it wrong in the private pension tax relief which absolutely does not stand up to any gender equality analysis. It is really important if this is a third leg to the stool or a new measure to ensure that we have a pension system in the State that we do not make the same mistakes. I cannot underscore this enough. Think of the three-legged stool. There are the private and public parts and we get gender equality wrong on both. If this is a new part, and a State-supported one, then it is fundamental that it delivers for gender equality otherwise there will be a legacy of failure. This will be one of the big tests of this scheme when we look back on this scheme in five or ten years. That is why it would be important for there to be someone on the authority board who has an expertise in gender equality and can bring that into play. That is not just about having women on the board. That is about having an expertise on gender equality by recognising that this is one of the danger areas for the State and one of the areas where the State has to show good faith to the women of Ireland and make up for lost ground and the mistakes of the past.
Amendment No. 11 seeks to amend the membership to ensure there is an expertise in economic and intergenerational equality. Again, unfortunately, the income inequality issues we have seen in some other parts of the pension policy should be addressed. We have talked about the intergenerational aspect and making sure that somebody can bring that perspective and that long arc that looks to pensioners, those about to be pensioners now and those who will come in the future in the long term, and ensures that we have a durable pension system in respect of them.
Amendment No. 12 seeks to remove the inadequate provision that one member of the board should be a person who has, in the opinion of the Minister, knowledge or experience in relation to the interests of employees and replace it with something a little more concrete, which is that it would be one member nominated by the Irish Congress of Trade Unions. I am thinking of previous debates with other Ministers. To be fair to the now Taoiseach, then Minister, Deputy Harris, we had this debate in relation to student unions. At the time, it was suggested that there be someone who could represent students onto the boards of higher education bodies and, following pressure in the Seanad and elsewhere, the Minister rightly agreed that, no, it would be a representative of the student unions who would go on the boards of higher education institutes. It was not simply a student who was selected by those in power to be the representative of students but actually a representative that students themselves selected. Similarly, it would be more appropriate if we had an employee representative who was someone that workers themselves had selected through their union to represent them on this board.
Amendment No. 14 seeks to amend section 11(5) by inserting a new paragraph which would require that one member of the board would be nominated by the National Women’s Council of Ireland. Again, that is a representative body representing a huge number of civil society groups across the State and, indeed, women across the State through those civil society groups. As I said, I have previously worked with the National Women’s Council on the issue of pensions. Long before I worked for it, it had a strong pension analysis and it has continued to do really important work in that area in the many years since I left. The National Women’s Council of Ireland is, again, a representative body which is a way of ensuring that expertise on gender equality, which is included in amendment No. 10, but also that there is a body with a history, record and a representative mandate in championing the issue of gender equality.
Finally, amendment No. 15 seeks to provide that within the investment committee there would be persons with expertise and experience on compliance with relevant domestic and international legal obligations. These are the issues I raised in relation to external asset managers. Since external asset managers are to be used, it is important that there is someone on the board who has a real understanding of our international and national obligations - I mentioned the cluster munitions legislation and fossil fuel divestment as just two examples – and who has the expertise to properly scrutinise, keep account and have oversight to ensure that those who act on our behalf, that is, external asset managers, are compliant. It is to ensure that expertise is at the table at the time it matters.
I will speak on amendment No. 13. We welcome that there is provision in the Bill that the board would include the appointment of a person who, in the opinion of the Minister, has knowledge or experience in matters relating to the interest of employees and that there will be representation of employees or representing the interests of employees.
The Minister will be aware of the pre-legislative recommendation which includes explicit representation of the Irish Congress of Trade Unions on the board.
Should it really fall to the Government of the day to decide who represents workers or should it fall to workers themselves? The Irish Congress of Trade Unions, ICTU, has a very clear mandate and it is very clearly the representative of workers in this country. While it will always fall to the Minister to appoint the individual, I take the very strong view that it should come on the back of proposals from the Irish Congress of Trade Unions to the Minister and to then let the Minister decide as opposed to perhaps in a future Government the Minister deciding that some random person speaks on behalf of workers. That to me jars with the relationship and the process that has evolved in recent years with the Labour Employer Economic Forum, LEEF, process. We hear Ministers repeatedly tell us about the good working relationship with those in the LEEF, which is led by the Government, IBEC and the Irish Congress of Trade Unions. I fail to understand why the Minister cannot explicitly reference trade unions as being the representatives of workers in this legislation. There is a fear that in future years we may see the Minister of the day deciding some random person is the person appointed to speak on behalf of workers. That would not be good enough. I do not believe it is the intent behind what the Minister wants in terms of the representation on the board. I ask her to get the design right now rather than having to fix it further down the line.
I thank the Senators for bringing forward these amendments. I do not propose to accept them.
The membership of the board of the National Automatic Enrolment Retirement Savings Authority, NAERSA, is not constituted on the basis of sectoral representation. Instead, it is based on what that person has to offer to the authority, and that is their skill set and experience.
One of the Senators mentioned gender balance. My record in ensuring there is a gender balance on State boards is there for all to see. I always, where I possibly can, make sure we have 50:50 representation on all State boards to which I appoint. It is done where at all possible. Sometimes, I manage to make it 60:40 in favour of female representation on the boards.
In light of its relevance to automatic enrolment, the Bill sets out that the board of NAERSA will contain a person who has "knowledge or experience in matters relating to the interests of employees." That person could well turn out to be a representative of ICTU or someone who would otherwise meet with the approval of trade unionists. However, it is important not to make this provision more specific than that. In fairness, we all know that trade unions and employer representatives have many opportunities to provide the Minister of the day with their views, because we meet them regularly.
I cannot accept the proposed amendments in this group. The Bill is already well considered and balanced when it comes to membership of the board. It is geared towards having the right people with the right expertise to run and oversee a retirement savings scheme, and everybody on the board will owe their duty to the authority alone. There are a lot of provisions in the Bill for investors to take account of our environmental, social, and governance, ESG, criteria.
I will again mention the gender gap. Automatic enrolment will represent a significant step in addressing existing pension coverage gaps in Ireland. It will result in hundreds of thousands of women being enrolled in a supplementary pension for the first time. In developing the final design, the Department has gender-proofed proposals to assess their impact on both men and women. Automatic enrolment will apply to all employees who meet the eligibility criteria, thereby giving women access to pensions in their own right. The system is going a considerable way to ensuring more women are brought into the savings system. The design of automatic enrolment ensures that there will be equality of access to supplementary pensions, in particular for those who are on low to average earnings, where pension coverage has traditionally been low. This is particularly relevant to women who have different experiences of employment in terms of employment rates, the prevalence of part-time work and lower earnings. For female and, indeed, male employees outside the age and earning criteria, the choice to opt-in to automatic enrolment will be made available to them. If they so choose, both their employer and the State will be compelled to make the matching and top-up contributions retrospectively.
While I appreciate the gender balance issue, gender equality expertise is the piece that is explicitly being sought. When we talk about these representative bodies, the member would, of course, be a member of a board and would have to operate for the good of the board. The question is about that expertise, however. We know there is an expertise that comes from having engagement with a huge, broad swathe of a constituency on an issue. Unions have that expertise. Indeed, the National Women's Council of Ireland has that expertise.
I would like to come back on amendment No. 15, which I do not believe the Minister addressed, in respect of expertise relating to our domestic and international legal obligations. It is something that was brought to my attention in the context of the debate on this legislation in the Dáil, which I had not seen. I believe Deputy Ó Cathasaigh tabled amendments regarding arms companies and cluster munitions legislation. The Minister indicated in her response that specific direction could not be provided to auto-enrolment providers as it is not public money. However, this legislation calls for the matching of State funds to contributions made by employers and employees. This is public money that is collectively being contributed in an investment in the security of the population's future in their pensions. I am extremely concerned that there is a suggestion that somehow there is a loophole here and we do not have to worry about investment in cluster bombs or arms manufacturers just because some other people are putting money in as well. I want to be explicitly clear that our cluster munitions legislation outlaws direct or indirect funding of any kind of munitions manufacture. However, the Minister's reply in the Dáil seems to suggest that she does not believe that legislation is a concern for us with regard to this scheme. The Minister might clarify or elaborate on that because it is a very significant issue.
Once money is given to a person, it is his or her money. It is in his or her pot. It is that person's pension pot. The money is a top-up for that person, so it becomes his or her property. That is what I mean when I say this is not State investment. This is for the members of the scheme. It is their money. It is not State money. That is why I said that.
We are really into an extremely serious issue then because it is State money. It is public money that is being given to individuals, and if it is being given to those individuals to invest in schemes that invest in arms, the Minister is out of line with regard to our national legislation on cluster munitions. She is out of line in that regard because it prohibits direct or indirect investment. Frankly, giving funds to an individual who is then going to invest in one of a number of consolidated schemes, which we will discuss in the context of later amendments, and to be cavalier about it is really worrying. It is extremely worrying. Are we to understand that the State is going to wash its hands completely of any of the environmental, social or governance issues, that the State does not care at all and that whatever these funds invest in is up for grabs?
Can they invest in big tobacco? Genuinely, I am quite shocked. Somebody drew this to my attention over the course of the debate. I assumed our concern was simply whether we had the right mechanisms in place to ensure we were in compliance with proper ESG standards and national law, whereas the Minister is now saying these schemes do not need to be compliant. That is completely different.
You are misrepresenting me.
My concern was whether we had effective mechanisms to ensure compliance, but the message is it is not State money so we are not bound by anything. Can it be invested in fossil fuels?
No, the Senator is misrepresenting me.
Okay, but I would like clarification. The Minister said it is not State money and not to do with us. I would like clarity on whether there are going to be safeguards. They are very basic. I have a wide range of environmental, social and governance issues I think the State should be tracking, but we actually have legislation in respect of cluster munitions and fossil fuel investment.
To be very clear here, and I have already said this, there are loads of provisions in the Bill to take account of the ESG. The State's obligations with regard to relevant international agreements would include the sustainable finance disclosure regulation, the UN Global Compact and the Paris Agreement, which guide the international community on matters such as carbon emissions and investment in unethical assets. In respect of these moneys, once the employer pays in, the employee pays in and the State tops it up, it becomes the member's money. It is not the State's money; it is the member's money. All of these safeguards are built into the legislation as to how it can be invested. They are all there. I do not want to be misrepresented here.
Can I ask for confirmation that the provisions of the cluster munitions legislation and the provisions of Fossil Fuel Divestment Act will be among those measures that are reflected in the safeguards? I have read the section. If we are talking about the Paris Agreement and these international obligations, I assumed that our national legislation would also be reflected. That is what I am asking. Are these covered? Is there any risk of us learning about these funds being inappropriately invested in respect of cluster munitions or fossil fuel?
All ESG matters are fully and comprehensively addressed in the Bill.
Amendment put and declared lost.
I move amendment No. 11:
In page 15, line 1, after “management,” to insert “economic and intergenerational equality,”.
Amendment put and declared lost.
I move amendment No. 12:
In page 15, to delete lines 4 and 5, and substitute the following:
“(a) one shall be appointed by the Minister upon nomination by the Irish Congress of Trade Unions, and”.
Amendment put and declared lost.
I move amendment No. 13:
In page 15, in line 4, after “Minister,” to insert “following consultation with trade unions, knowledge or experience in matters relating to the interests of employees, and”.
Amendment put and declared lost.
I move amendment No. 14:
In page 15, between lines 5 and 6, to insert the following:
“(b) one shall be appointed by the Minister who is a representative of the National Women’s Council of Ireland, and”.
Amendment put and declared lost.
Section 11 agreed to.
Sections 12 to 18, inclusive, agreed to.
SECTION 19
I move amendment No. 15:
In page 20, line 13, after “experience” to insert the following:
“, including expertise and experience in compliance with relevant domestic and international legal obligations,”.
Amendment put and declared lost.
Section 19 agreed to.
Sections 20 to 30, inclusive, agreed to.
SECTION 31
Amendments Nos. 16 to 18, inclusive, are related and may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 16:
In page 28, between lines 16 and 17, to insert the following:
“(4) The Authority shall on an annual basis lay before both Houses of the Oireachtas a record of consultants or advisors engaged under subsection (1) in the preceding financial year and the purposes of such engagement.”.
Amendment No. 16 would insert a new subsection into section 31 whereby, when the authority engages consultants or advisers under subsection (1), it would be required to relay annually before both Houses of the Oireachtas a record of the consultants or advisers and the purpose of their engagement.
Amendment No. 17 would insert a new subsection into section 31 which would provide that, where the authority engages persons to provide services, it may not advertise or enter into the contracts on the basis of only the lowest price offered by such service providers and that there would be strong quality criteria in terms of who would be engaged. That is a price-quality procurement model rather than a lowest price only model.
Amendment No. 18 would insert a new subsection into section 31 which would provide that, for the avoidance of doubt, the authority would not engage persons to provide services where such services are related to decision-making in respect of the individual entitlements of contributing participants or employees.
I thank the Senator for bringing these forward. The Bill already sets out in section 40 that the authority will provide a comprehensive and detailed annual report. As is the nature of these things, all financial matters, including what is envisaged by the Senator, will be covered, so no amendment is needed.
As for the other two amendments, one of them cannot be accepted because any procurements conducted by NAERSA would already be governed by procurement law. It is not appropriate to set down further restrictions on the NAERSA approach to procurement that could potentially conflict with this law.
As for the next amendment, the automatic enrolment Bill provides for determinations to be made by NAERSA. Should a participant be dissatisfied with a determination made by NAERSA, they can request a review, which is also appealable. The authority holds central responsibility here for decision-making. I do not propose to accept these amendments.
Amendment put and declared lost.
Section 31 agreed to.
SECTION 32
Amendment No. 17 not moved.
I move amendment No. 18:
In page 28, after line 36, to insert the following:
“(4) For the avoidance of doubt, the Authority may not engage persons to provide services where such services are related to decision making in respect of individual entitlements of contributing participants or employees.”.
Amendment, by leave, withdrawn.
Section 32 agreed to.
SECTION 33
Amendments Nos. 19, 26, 27, 51, 53, 64, and 66 to 70, inclusive, are related. Amendment No. 27 is a logical alternative to amendment No. 26. Amendments Nos. 19, 26, 27, 51, 53, 64, and 66 to 70, inclusive, may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 19:
In page 29, between lines 13 and 14, to insert the following:
“(c) the investment strategy or investment decisions carried out under this Act,”.
Amendment No. 19 seeks to amend section 33 to provide that within the obligations of the chief executive to appear before the Committee of Public Accounts, he or she would be required to give evidence in regard to the investment strategy or investment decisions carried out under this Act.
Amendment No. 26 seeks to amend section 43(3) to provide that the ability of the authority to ensure that investments are made on an ethical basis in line with best practice and domestic and international law will be included as part of a review of the effectiveness of the Act.
Amendment No. 51 seeks to amend section 68(4) to provide that an investment manager contract would include provisions under which the authority, the Minister or both Houses of the Oireachtas might instruct the investment management provider to divest from certain portfolios where ethical issues arise.
Amendment No. 64 seeks to insert a new section providing that the authority would ensure that the assets of a relevant auto-enrolment provider scheme are not directly or indirectly invested in cryptocurrency or portfolios which are exposed to cryptocurrencies. The definition of “cryptocurrency” used is taken from the Government's Electoral Reform Act 2022.
Amendment No. 66 seeks to amend section 75(1) by inserting a new paragraph which would require that provisions around environmental risks should be in compliance with obligations under the Fossil Fuel Divestment Act 2018. I thought this provision was a safety net or an avoidance-of-doubt measure but I am still extremely concerned. I thought the argument would be that we are already required to be compliant but that does not seem to be the argument we are getting. I am concerned. It would be appropriate to copper-fasten the commitment to compliance with obligations under the Fossil Fuel Divestment Act rather than the more general language of environmental risk, which is wider and subject to interpretation.
Amendment No. 67 seeks to insert a new section mirroring the provisions of the Fossil Fuel Divestment Act 2018 and the very recent transposition of those provisions into the Future Ireland Fund and Infrastructure, Nature and Climate Fund Act 2024, which is, shockingly, missing from this Bill. This is a huge amount of public money. When we talk about how our public money is being used and directed, we have obligations to ensure that it is used in the best possible way and in ways that are certainly not doing harm. It was appropriate with regard to the Future Ireland Fund and the Infrastructure, Nature and Climate Fund that the provisions of the Fossil Fuel Divestment Act 2018 were echoed. However, we do not see those provisions echoed in this legislation. What we see is very weak language that does not give us strong assurances in terms of a guarantee of the kind of hard and solid measures that we have seen regarding divestment from fossil fuels.
Amendment No. 68 seeks to insert a new section providing that, in accordance with Part 4 of the Act of 2008, the authority would not directly or indirectly invest the assets of a relevant auto-enrolment provider in munitions companies; and that where assets of a relevant auto-enrolment provider scheme have been directly or indirectly invested in a company which is or becomes a munitions company, the authority would seek the divestment of such assets immediately.
Amendment No. 69 seeks to insert a new section providing that the authority would ensure that the assets of a relevant auto-enrolment provider scheme are not directly or indirectly invested in an undertaking operating within an occupied territory; and where the authority becomes aware that an undertaking in which the assets of a relevant scheme are directly or indirectly invested becomes an undertaking operating in an occupied territory, the authority would ensure divestment of the assets.
Amendment No. 70 seeks to insert a new section providing that the authority would ensure the assets of a relevant AE provider scheme are not directly or indirectly invested in undertakings carrying out business in a territory where they do not have a legal basis to do so; and where the authority becomes aware that such an undertaking is operating in a territory where it does not have a legal basis to do so, the relevant AE provider will be required to divest its assets from such an investment as soon as practicable.
With regard to this final amendment, we have heard a lot with regard to occupied territories and the point that it is difficult for the State to decide what is an occupied territory. There is clear guidance on how to determine what is an illegally occupied territory from the International Court of Justice and under the Geneva Convention - it is right there. However, in failing to address that issue, we have left ourselves in another legally ambiguous situation, which is the question of what is the basis on which we invest or trade with those who are operating without a legal basis. If a company, however big it is, is currently trading in illegally occupied territories, the question is on what legal basis it is trading. For example, in the case of the most commonly given example, and probably the one that is most pertinent at the moment, which is the occupied Palestinian territories, is it trading under the illusion that it has a legal basis to do so? If it is a big company or undertaking that is operating in the occupied Palestinian settlements, those are illegal settlements, so what is the basis for that? The company is not operating under the EU-Israel association agreement because it explicitly cannot include occupied territories. It is not operating under WTO or GATT rules because they require a jurisdictional mandate to have been given, and it has not been given.
There are many companies in this position. It is not a matter of asking if it is legal to take our money out of illegally occupied territories. The point is that it is not really legal to have our money in illegally occupied territories. It would be appropriate for us to start talking about how that is legal, and if it is not legal, maybe we should not be doing it. That is why, if we have undertakings that are operating in territories where they do not have a legal basis to operate, public money should not be contributing to that, even if it is public money given to an individual or given to a fund.
There are huge questions here. Morally, the whole basis of the scheme is that if we have a situation where we see a washing of hands in regard to what happens with the money, then, to come back to the universal pension, we have to say that maybe it is not appropriate to have our public money going into a scheme where we effectively abdicate what happens to the public money in terms of these providers and of ethics. Maybe it would be better to have the State investing its money in such a way that we know we can track it and know it is ethical, in a way that can be accountable and responsive, rather than having a huge amount of public money leaving State hands and going into a system.
When I look at section 43 and other sections, I do not see strong enough controls in terms of what we discussed earlier. We are hearing a lot of language about how it is not our money now. Frankly, it is not responsible use of public moneys to put them out of reach of accountability and put them where simply delivering a return will be the only piece in play. In fact, they do not even need to deliver a return depending on what level of risk might be attached.
I am concerned. It is a long group of amendments and all of them are about ethics. I ask the Minister to address them one by one and give me some assurance as to how these issues are going to be reflected.
I cannot accept any of these amendments. I want to say very clearly that this is not public money. Once it is given, it becomes the private property of the individual. I need to emphasise that NAERSA will not be administering a new State fund but, rather, will be administering hundreds of thousands of individual savings accounts that are and will remain the personal property of the automatic enrolment participant.
The automatic enrolment project, in that sense, is a State-incentivised personal retirement saving scheme for individuals, rather than a new national fund. It is important that we treat automatic enrolment participants' money on a par with moneys invested in occupational or supplementary pension schemes. We must not force automatic enrolment participants' investments into overly concentrated or niche risk profiles.
Regarding amendment No. 19, it would not be appropriate to require the chief executive of the authority to give evidence to the Committee of Public Accounts about decisions that are fundamentally dictated and regulated by the provisions of the Bill itself and are then implemented in terms of actual operational detail by commercial investment managers.
On the other amendments, as I explained at length on various Stages in the Dáil, the Bill already makes strong provision regarding ethical and environmental matters, while ensuring the best interests of participants are central to the responsibilities of the authority. Each of the investment funds will have environmental, social and governance principles embedded in their design. In that context, each of the fund offerings under the Bill will be an ethical fund. The Senator should note that the Bill includes two full pages setting out controls in respect of investments. It is useful to consider all the controls that are being put in place.
On the proposed amendment regarding cryptocurrencies, section 74 of the Bill provides a comprehensive set of investment rules, including arrangements to invest participants' funds in predominantly regulated markets. Section 69 sets out provisions regarding collective investment in transferable securities, UCITS, investment funds and alternative investment funds. I do not propose to accept the amendment as it is unnecessary.
I am looking at the two pages to which the Minister referred. There are approximately four lines that relate to any of the ethical issues I have outlined. There is a section in which we can choose to set out clear investment criteria and rules, which supposedly will apply. We are hearing a contradictory argument from the Minister. On the one hand, she is saying this is none of our business because it involves private money and that money does what it likes. On the other hand, she is saying there are loads of controls in the Bill. The Minister is making contradictory arguments.
If investment rules are being set out in this section, why will she not include provision for the ethical issues I have highlighted in this group of amendments? Most of what is set out in these two or three pages does not relate to ethics. There is reference to insurance policies and how to invest in them. There is provision for diversification and regarding the liquidity and profitability of portfolios. Then there is the reference to an obligation to "take into account the potential long-term impact of investment decisions on environmental, social and governance factors". That is it. We are missing the opportunity to set out, for example, that not investing in arms and fossil fuels is a key environmental, social and governance factor. The opportunity is there to set out some of the environmental, social and governance factors with which there should be compliance. We are not even asking for such compliance. There is simply a reference to environmental, social and governance factors, which can be interpreted however.
Section 75 goes a little further into environmental, social and governance factors. It requires an investment management provider to "make provision in its risk management system to take account of risks arising from" those factors. The section further states that providers shall, from time to time, produce statements describing how considerations of environmental, social and governance factors have affected their investment decisions. Subsection (3), which might be what the Minister referenced, requires that an investment manager shall make provision for "the obligations of the State under international agreements on environmental sustainability and climate change to be taken into account". That is weak language. It is not compliance language. It is not consistent with the Paris Agreement. Indeed, the Paris Agreement is not named. There is simply a reference to taking account of international agreements on environmental sustainability and climate change. If the Minister is able to include a provision that the obligations of the State in this regard must be taken into account by investment managers when carrying out a contract, why can she not include something that requires compliance with, or even just takes into account, the fossil fuel divestment legislation or the cluster munitions legislation?
The State's obligations in regard to environmental sustainability and climate change are referenced in this section but the Minister keeps saying the investments we are discussing are nothing to do with those obligations and the State's laws do not apply because this is private money. However, section 75 states that account must, in fact, be taken of the State's obligations. There is a contradiction here. On the one hand, we have very weak measures regarding international agreements on environmental, social and governance responsibilities, which are meant to reassure us. On the other hand, we are being told there are, in effect, no obligations in this regard on providers because the obligations on the State do not apply to them. That is a contradiction.
The regulation provided for is weak and we are hearing an argument for no regulation. If it is the case that we can insert investment rules and requirements - there are two and a half pages on that in the Bill, as the Minister said - why do those rules not include really basic requirements like there being no investment in arms manufacturing, which has been a policy of the State for years under the cluster munitions legislation? Such provision needs to be included and it must be clear. It should not just require no investment in cluster munitions but that we must not invest directly or indirectly in munitions. If that is the policy, why would it not be reflected in the Bill? We have very weak language on the climate aspect and there is nothing on the arms issue.
This is a cause of concern to me. One of the big growth areas for investments right now, across the world, is the arms industry. If people want to make a lot of money really quickly, they put it into arms. The industry is booming. This is not an abstract, ye-olde-style, peacenik measure. It is a matter of genuine jeopardy for the State. Arms manufacturers' profits are booming. Germany saw a tenfold increase in its arms sales last year, from €33 million to €330 million, to Israel alone. My concern is that there is potential under these provisions for investment in some of those companies. Will that be captured under the ESG measures? The current provision refers to taking into account environmental, social and governance measures. That is all it says. The requirement is left to be interpreted by the individual investment providers. We have the opportunity, if we so choose, to give stronger direction in sections 74 and 75. I would like the Minister to comment on that.
I am sure common sense will come into play when the legislation is up and running. I am certain the questions posed by Senator Higgins will be answered. Section 33 makes provision for appearances by members of the board of the authority before the Committee of Public Accounts. I am sure the CEO, chairperson and whoever else will be brought in at several stages, either at the request of the committee itself or at the request of the Minister, to account for their stewardship. The committee members will be able to ask the Senator's questions and there will be consequences if improper investments are made.
Senator Burke has made a constructive proposal. I put in an amendment explicitly requiring that when board members come before the Committee of Public Accounts, investment policies and strategies should be part of the committee's remit and should form part of the discussion. That amendment was not accepted. Sadly, the Committee of Public Accounts will not be able to track these issues.
I will say this again because I do not think it was understood the first time.
Investment decisions will be the responsibility of the investment managers operating under a services contract with NAERSA. The investment strategy is set out in the Bill in quite some detail and NAERSA, in negotiating contracts with investment managers, will apply those statutory requirements. ESG arrangements are further provided for in section 74, which sets out the investment rules that will be applicable to contracted service providers. This section ensures ESG considerations will be taken into account when the investment management providers invest participants' savings. In addition, section 75 provides that the obligations of the State under international agreements on environmental sustainability and climate change must be taken into account in the framing of the investment management contracts. The State's obligations with regard to relevant international agreements, although not needing to be specified in the Bill, include the sustainable finance disclosure regulation, the UN Global Compact and the Paris Agreement, which guide the international community on matters such as carbon emissions and investment in unethical assets.
The inclusion of an additional and highly specific fund as proposed by the Senator would add to the costs of the system, which would be borne by the participants. This is because the system is based on a default approach whereby all participants will be brought into a default investment strategy and then given the option of making an alternative choice. However, the vast majority of participants will not in fact make an active choice. Evidence in the UK has shown that 99% of those placed in NEST funds remain in the default funds despite a range of alternative options being made available. For that reason, an extra fund in the AE system would be uneconomical. I will leave it at that.
I will finish by saying I do not think it is uneconomical to simply have compliance with basic ethical standards. I do not think it is a niche product or a niche thing to say there would be investments that do not invest in areas such as arms or in occupied territories.
That is not what I said.
That is not niche. It should be standard.
Amendment No. 19 is the one that suggests the chief executive, when he or she appears before the public accounts committee, would be required to give evidence on the investment strategy. As pointed out, that was the expectation that members of the public accounts committee probably had, and it was reflected in the Senator on the other side when he spoke about that expectation. This is my amendment to ensure that would be able to happen and I will press that amendment.
Amendment put and declared lost.
Section 33 agreed to.
Section 34 and 35 agreed to.
SECTION 36
Question proposed: "That section 36 stand part of the Bill."
Section 36 is a section that gives to the authority the power to borrow. Under what circumstances would this authority be borrowing money? I did not think it would have a requirement for borrowing given that the Bill provides for the Oireachtas to make provision for setting up the whole structure. Under what circumstances would the authority be borrowing and why do we have to give it, in the Bill, the power to borrow?
I thank the Senator. The purpose of NAERSA is to manage all of this and to act in the interests of the participants or the members of the scheme. The objective is that it will be self-financing, but to set it up in the initial years, we need to give it powers to borrow because it takes a while for this to ramp up. That is why we are allowing it those powers.
Question put and agreed to.
SECTION 37
Amendments Nos. 20 to 25, inclusive, are related. Amendment No. 23 is a logical alternative to No. 22. Amendments Nos. 22 to 25, inclusive, may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 20:
In page 32, between lines 11 and 12, to insert the following:
“(d) specify the manner in which the objectives, intended outputs and related strategies of the Authority have been subject to gender and equality proofing,”.
Amendment No. 20 seeks to amend section 37(4) to provide that the board's statement of strategy would specify the manner in which the objectives, intended outputs and related strategies of the authority have been subject to gender and equality proofing. I appreciate that the Minister indicated there was some gender-proofing earlier in the design but this is about ensuing we would specify and hear within the statement of strategy clear objectives, intended outputs and strategies regarding how that gender and equality proofing would be delivered.
Amendment No. 22 seeks to amend section 42 by inserting a new paragraph requiring that the authority would collect:
statistical data in relation to participation in and financial benefit from the automatic enrolment retirement savings system disaggregated on the basis of
(i) gender;
(ii) class;
(iii) disability;
(iv) ethnicity;
(v) marital status;
(vi) family status and;
(vii) history of engagement in the labour market.
Amendment No. 23 is an alternative which similarly looks to the statistical data being disaggregated on the basis of gender, disability, marital status, family status and history of engagement in the labour market. Regarding these two amendments, there is a subtle difference in that, in amendment No. 23, I stick closer to the nine equality grounds as are.
Amendment No. 24 seeks to amend section 42(1)(b) by providing that statistical data relating to the types of investments held by provider schemes would be disaggregated. This will help ensure transparency on how people's retirement money is being spent.
Amendment No. 25 seeks to amend 43(3) to ensure that, within the power to review the effectiveness of the Act, the authority would review the gender and equality impacts of the automatic enrolment retirement saving schemes.
Some of that disaggregation matters because it is how we know who this is working for and to see, from the perspective of gender, disability and ethnicity, including, of course, membership of the Traveller community, if it is working for all sections in our society. Family status is probably one of the most important there. Is this a scheme that is actually going to be beneficial to and benefit some of the most deprived and most hard-pressed within the State, including, for example, those parenting alone, who we know have the highest deprivation rates and many of whom, when working, are working in part-time and low-paid work? Breaking down who this works for, not just on a gender basis but within some of the other categories, will be important in ensuring the scheme is effective and working. Disaggregated data allows us to make better decisions and better policy adjustments and I hope the Minister may indicate how she plans to ensure we have statistical data which dives in a bit deeper and gives us the kind of information we need to ensure this scheme is as effective as I know she hopes it will be.
I thank the Senator for bringing these amendments forward. I point out that NAERSA will not be established as a research institute. Ireland already has a number of world-class institutes and universities with the ability to undertake a detailed analysis of automatic enrolment and its participants in due course. I do not intend to overburden NAERSA with unnecessary matters. The Bill already provides for annual reviews and a comprehensive review of how the system is working within five years of its operation, and that is enough.
With regard to the amendment on gender and equality proofing, this has already been built into the design of the automatic enrolment system and it is reflected in the regulatory impact assessment, RIA, that preceded this Bill.
Regarding the amendment on reviewing occupation pensions, they do not come within the scope of this Bill or the function of NAERSA. The Pensions Authority already has a role here. Automatic enrolment is a retirement savings system built on payroll data. The authority will not know and will not need to know every detail about every participant. It would not even be permissible under GDPR legislation to seek and retain all the data the Senator suggests. Therefore, I cannot support or accept these amendments.
Amendment put and declared lost.
Section 37 agreed to.
Sections 38 and 39 agreed to.
SECTION 40
Amendment No. 21 in the names of Senators Sherlock, Hoey, Moynihan and Wall cannot be moved.
Amendment No. 21 not moved.
Section 40 agreed to.
Section 41 agreed to.
SECTION 42
I move amendment No. 22:
In page 35, between lines 6 and 7, to insert the following:
“(b) statistical data in relation to participation in and financial benefit from the automatic enrolment retirement savings system disaggregated on the basis of—
(i) gender;
(ii) class;
(iii) disability;
(iv) ethnicity;
(v) marital status;
(vi) family status and;
(vii) history of engagement in the labour market,”.
Amendment put and declared lost.
I move amendment No. 23:
In page 35, between lines 6 and 7, to insert the following:
“(b) statistical data in relation to participation in and financial benefit from the automatic enrolment retirement savings system disaggregated on the basis of—
(i) gender;
(ii) disability;
(iii) ethnicity;
(iv) marital status;
(v) family status and;
(vi) history of engagement in the labour market,”.
Amendment put and declared lost.
I move amendment No. 24:
In page 35, line 7, before “statistical” to insert “disaggregated”.
Amendment put and declared lost.
Section 42 agreed to.
SECTION 43
I move amendment No 25:
In page 35, between lines 24 and 25, to insert the following:
“(e) the gender and equality impact of the automatic enrolment retirement savings system;”.
Amendment put and declared lost.
I move amendment No. 26:
In page 35, between lines 24 and 25, to insert the following:
“(e) the ability of the Authority to ensure that investments are made on an ethical basis in line with domestic and international law;”.
Amendment put and declared lost.
I move amendment No. 27:
In page 35, between lines 24 and 25, to insert the following:
“(e) the ability of the Authority to ensure that investments are made on an ethical basis in line with best practice and domestic and international law;”.
Amendment put and declared lost.
Question proposed: "That section 43 stand part of the Bill."
On section 43, is there an age where it may not be suitable for a person to join the auto-enrolment scheme? If a someone is due to retire at 66 or 70 years of age and he or she is 50 or 60 years of age is there an age where he or she should not join the auto-enrolment scheme or where it would not be advisable or worthwhile to invest in? If this is the start of the auto-enrolment scheme and the first time it is taking place, from what age should it not apply to people? It applies to everybody but if it may not be attractive for a person to apply to join the auto-enrolment scheme should he or she not apply if above a certain age?
People can join the auto-enrolment scheme at any age but not after the age of 66. If someone is late coming into the scheme there are arrangements so he or she can access the scheme. If someone was joining the auto-enrolment scheme at the age of 60 it would be to his or her benefit because he or she would have a savings pot by the time of retirement because when the employer contributions and the State top-up are applied it is of benefit to join the system
At what age does the scheme finish? Can a person go on until he or she is 70 years old? The Minister said people can join at the age of 66.
A person cannot join after the age of 66.
A person cannot join after the age of 66 but could join the scheme any year before that so would avail of the €1 for the pension pot from the Government and the employer. A person cannot join the scheme after the age of 66 but could join at the age of 65.
Question put and agreed to.
Sections 44 to 46, inclusive, agreed to.
SECTION 47
Government amendment No 28:
In page 38, line 36, to delete “a” and substitute “any”.
Amendment agreed to.
Amendments Nos. 29, 50, 107, 109, 112 to 118, inclusive, 120, 121 and 128 are related and may be discussed together by agreement.
Government amendment No. 29:
In page 39, to delete line 1 and substitute the following:
“ “employer” means any person paying emoluments (and, in relation to an employee, means the person paying emoluments to the employee);”.
This is another group of technical amendments identified by the Office of the Parliamentary Counsel as representing an improvement on the Bill as it stands. None of these amendments relates to substantive policy matters.
Amendment agreed to.
Section 47, as amended, agreed to.
Sections 48 and 49 agreed to.
SECTION 50
Amendment No. 30 in the names of Senators Sherlock, Hoey, Moynihan and Wall is out of order because of a potential charge on the Revenue.
Amendment No. 30 not moved.
Amendments Nos. 31 and 32 by Senator Higgins are out of order as there is a potential charge on the Revenue.
Amendment Nos. 31 and 32 not moved.
Question, "That section 50 stand part of the Bill", put and declared carried.
Section 51 agreed to.
SECTION 52
Government amendment No. 33:
In page 42, lines 29 and 30, to delete “paragraphs (a), (b) and (c)” and substitute “paragraphs (a), (b), (c) and (d)”.
Amendment agreed to.
I move amendment No. 34:
In page 42, line 31, to delete “years 7 to 9” and substitute “years 4 to 6”.
In terms of the period of time where the Bill allows for seven years to consider those employees who are currently in exempted employment, there is a concern that employees who will not currently be covered by auto-enrolment will be waiting for seven years and we want to reduce that period to between years four and six. I am not clear, and the Minister might provide clarity, as to why years seven to nine were decided. It appears to be somewhat arbitrary. I may have asked this question on Second Stage as to whether the Pensions Authority was consulted and what expert opinion was relied upon with regard to this provision for years seven to nine. Ultimately our appeal is to shorten the period upon which these workers will be brought into the auto-enrolment scheme because we see there will be lost years of the State 's and perhaps the employers' contributions towards those who have a PRSA or are in an occupational pension scheme. There is a wider question as to what employers will do to their occupational pension schemes when auto-enrolment is up and running. Our precise point is the length of time it will take for these workers to be brought into the system. What information or guidance has the Minister received from the Pensions Authority on years seven to nine or what other expert advice was received by the Minister with regard to this provision?
Does the Minister wish to respond? I know there is a division in the Dáil.
I will respond first. I acknowledge the Senators only have the greatest intentions with this amendment but I am afraid that, as in the Dáil, I am unable to accept it.
While this amendment may seem straightforward and I accept the Senators' bona fides in tabling it, a range of complexities mean it would require time to determine the appropriate standards that should apply in respect of employments that will be exempt from the requirement to make automatic enrolment contributions. The Bill sets out that the Pensions Authority will assist the new authority in this work over the coming years. The Pensions Authority will be involved and is happy to work with us. This work will be completed by the end of year six, at the very latest.
As most contribution rates in employment-based schemes are around 5% for employers and employees, the issue is not particularly relevant until contribution rates in automatic enrolment are up at comparable levels.
Excuse me, I will have to go to the vote.
I propose we suspend until the conclusion of the division in the Dáil.
Is that agreed? Agreed.
Cuireadh an Seanad ar fionraí ar 8.01 p.m. agus cuireadh tús leis arís ar 8.20 p.m.
Sitting suspended at 8.01 p.m. and resumed at 8.20 p.m.
This amendment addresses the same issue that I seek to amend in a number of my amendments as well. Senator Sherlock was highlighting the issue of the age threshold of 23 for starting payments and the income threshold of €20,000 in terms of the making of payments. This will see low-income workers and those who are without a university education, in effect, excluded from the scheme. If we look to the problem of the incentives such as tax reliefs that I have spoken about before, they have been skewed towards higher earners. Even though we now have a much wider pool, there is a danger that we will see the same division happening again within this scheme, where those who start work straight out of school may find themselves not in the scheme. We know that if people start out at work and are not in this scheme, it makes it less likely that they will join the scheme. One of the advantages of auto-enrolment is the idea that people are encouraged almost automatically to engage with their pension at this early stage and early age. I think the threshold is quite exclusionary.
Let us talk about the figure of €20,000. This is far more than 50% of the minimum wage. In fact, 50% of the minimum wage would be €13,208 per year. Half of the minimum wage is what many workers with care commitments who are working half time may be earning. We spoke earlier about this and it was one of my big concerns. In the context of our public contributory pension system, we failed those who care. We have a tax relief that does nothing for those who care but, rather, benefits wealthier earners. We have a problem here in that those who are working part time because of care commitments will potentially be excluded from the scheme. This is a mistake we make all the time. It is exactly those who most need to benefit from schemes who get excluded from them. Another example is when there was a requirement for making PRSI payments for spouses on family farms. This was a potentially great directive from Europe that would provide the capacity to have independent status within the social protection system and credits for those who are spouses on family farms or businesses. However, there was a threshold provided and people had to earn a certain amount of money before they could do it. Even though the whole point was that these were people who were contributing in a usually unwaged way and that their contribution would be recognised with a contribution, a contributory threshold was put up. I think self-employed people had to have €5,000 in cash that comes into hands, which meant that lots of spouses on family farms did not qualify. Similarly, we have a scheme that is supposedly meant to address the gender and employment gaps and yet a large number of part-time workers will not be able to access the scheme. These are exactly the persons who need to have the safeguard of a pension. Sadly, that €20,000 threshold will not only exclude those who are working part time. There are a lot of people working in the State who earn less than €20,000. There are people who are working 60% or 70% hours and who will still fall below the minimum wage under this measure.
I am concerned that the trickle-down approach we have taken with pensions is going to be replicated here. My amendments Nos. 37 and 38, which we will come to shortly, echo the point that Senator Sherlock was making, which is that we need to ensure that we properly gender and equality proof these measures. I keep saying this because I think it will be those on lower incomes and those who care who will be disadvantaged by these thresholds and measures, and a majority of those people will be women. More widely, there is an equality issue but the burden of the inequality created by a poorly designed policy will fall on women.
Before I call on the Minister, I welcome Bryan Mallon and his family and friends from Julianstown, County Meath. They are visitors of the Minister of State, Deputy Byrne. Thank you for being here. Go raibh míle maith agaibh.
On a point of clarification, was the Senator speaking to amendments Nos. 37 and 38?
I was speaking to the issues raised in amendment No. 34 from Senator Sherlock. The issues are similar to those addressed in amendments Nos. 37 and 38 but they are not grouped. I checked to see if they were grouped but apparently they are not.
They are not grouped but they are similar, so I will answer the issues the Senator raised. That is okay. Amendments Nos. 37 and 38 relate to the power to amend the age limits and the earnings threshold.
No, we are on section 52, amendment No. 34.
That is all right. There are a number of relevant issues. The standards that need to be set will not only be about the contribution levels into an alternative pension scheme, as compared with the contribution levels into the AE scheme. This is about setting standards, which is the amendment. The Bill sets out clear instructions when it comes to contribution levels. They are always to be based on gross earnings, to be matched by the employers and to be topped up by the State. The net amount going into a person's pension pot through auto-enrolment will be transparent and easy to calculate. In contrast, contributions to other pension schemes can start from a base other than gross earnings. Sometimes the employers contribute and sometimes they do not. The tax relief applicable also plays a role. As such, to try to compare the net amount going into a person's pension pot from auto-enrolment versus a different pension scheme is a bit like comparing apples and oranges. There are different benefits in different pension schemes.
There are also issues relating to supplementary benefits, which are provided by some pension schemes. In other words, a person could have a pension built in for their partner but it may not be provided by auto-enrolment or may not be provided in the same way, for example a spousal benefit. The value of these benefits to the individual, compared with what auto-enrolment has to offer, will depend on that person's personal circumstances and earnings.
There is a range of technical issues relating to the reporting of data to the new authority. These will need to be determined with the assistance of the Revenue Commissioners and the Pensions Authority. They will require technical systems to be developed to ensure they operate as intended. I cannot accept these amendments.
SECTION 56
Amendment put and declared lost.
Section 52, as amended, agreed to.
SECTION 53
Government amendment No. 35:
In page 43, line 18, after “determination” to insert the following:
“and of the enrolment date referred to in subsection (1) or the re-enrolment date referred to in subsection (3)”.
Amendment agreed to.
Government amendment No. 36:
In page 43, to delete lines 21 and 22 and substitute the following:
“(8) An employer to whom notice is given under subsection (7) shall give notice of the determination and the enrolment date or re-enrolment date, as the case may be, to the employee concerned.
(9) An employer to whom notice is given under subsection (7), who fails to give notice of the determination and the enrolment date or re-enrolment date in accordance with subsection (8), is guilty of an offence.”.
Amendment agreed to.
Section 53, as amended, agreed to.
Sections 54 and 55 agreed to.
Amendments Nos. 37 and 38 are related and may be discussed together by agreement. Is that agreed? Agreed.
I move amendment No. 37:
In page 44, between lines 30 and 31, to insert the following:
“(c) the gender and equality implications of the prescribed age and prescribed amount;”.
Amendment No. 37 seeks to amend section 56(2) by inserting a new paragraph providing that when making decisions on the prescribed age and earning limits under the scheme the Minister would have regard to the gender and equality implications thereof.
I am not going to elaborate too much because I have spoken about these issues when discussing the amendment tabled by Senator Sherlock. Effectively, the gender and equality implications of a "prescribed age and a prescribed amount" need to be considered. I have outlined some of the explicit and specific ways. There are negative gender and equality implications about what is initially prescribed, namely the decision to have an age threshold of 23 in terms of starting payments. Again, I said it is an inequality for those who may not have college education and who may be entering the workplace at a young age. It may be due to parents or family status that they are not attending university and that they are seeking to earn at an early stage. There are equality implications. So those sectors in society who are less likely to attend university education will now be doubly disadvantaged as in they will also be less likely to be able to access the scheme in terms of securing their future.
Let us bear the following in mind, and this is an issue that we have seen in France and elsewhere. Those who start working at 18 years may well wish to retire at an age of 65 or 67. They may not wish to work until 70 years, as we heard about some of the schemes earlier, because if they are working for extremely long periods they may not wish to have the same length of work at the other end of their working life. This is something that we have seen in some of the debate that took place in France which recognised that there are those who have a long working life but it begins at a very early age.
Again, there are equality issues in terms of the age threshold at 23. There are practical issues in terms of missing the opportunity to engage people at the earliest point and make it an automatic part of a person being in the workplace that he or she contributes to a pension. There are serious concerning issues about the income threshold of €20,000. I have outlined that such a threshold really disadvantages those in part-time work and women, in particular, because they are more like to have part-time employment, and more likely to be on low wages and low income. It is a fact that I used to extensively quote the Women and Men in Ireland study by the Central Statistics Office when I worked for the National Women's Council of Ireland. The CSO used to produce the study as part of its annual review and the study contained lots of useful statistics on men and women in Ireland. I quoted the study for a couple of years. When the next study was produced the CSO had stopped provided that statistic, which was interesting. Then the CSO stopped producing the Women and Men in Ireland study on an annual basis and produced it on a three-year basis. That meant it became increasingly harder to get the figures. However, the 2015 figures show that 50% of women in the State earned €20,000 or less. None of them would qualify under the threshold set out in this legislation. That is a useful but somewhat out-of-date statistic but one we should bear in mind when considering thresholds and the kind of information that would be useful if one had a gender and equality analysis in respect of the prescribing of age and earning limits.
Amendment No. 38 seeks to amend section 56 by inserting a new subsection which provides that in making determinations around age and income thresholds that "the Minister shall have due regard" to the need to ensure that persons availing of carer's allowance, or the one-parent family payment. For example, these people may qualify for the income disregard but may be working. There are others who are working but for amounts that fall underneath the income disregard as they are carers or one-parent families. It would be really good that as well as building an attachment to the workplace they would build an attachment to a pension system that might give them security in the long term.
Amendment No. 38 states that "carers allowance, the one-parent family payment, disability allowance or the working family payment have equitable access to secure pensions.” so that we do not see those who are disadvantaged in terms of either their working capacity or working hours of availability - to the point where they do need income supplements from the State currently - finding themselves further disadvantaged when it comes to their later life and retirement. I hope that the Minister will consider my amendments No. 37 and 38.
It is regrettable that no amendments have been accepted because there are Government amendments. There are amendments on ethics, oversight and other practical amendments on offer, even the SIPO one, so that when people appear before the Committee on Public Accounts, they might actually discuss investment strategy and policy. Accepting any of those amendments would not have delayed the Bill one jot because there are so many Government amendments. We legislate at our best in these Houses when there is genuine consideration given to whether an amendment could strengthen or improve a Bill. I believe genuinely that there have been some amendments put forward that would have strengthened the Bill, would not have cut across its purposes and certainly would not have delayed the Bill one iota given that so many Government amendments have been tabled. It is regrettable that we are losing an opportunity to have amendments Nos. 37 and 38 aaccepted.
I thank the Senator for tabling her amendments but I do not propose to accept them. A wide range of factors will go into any future consideration of the age and earnings thresholds. We do not need to specify here a selection of those considerations. In making any decisions to amend the eligibility thresholds, section 56 will take into account the gender and equality considerations proposed in the amendment and the periodic review, in section 43, will encompass a broad range of matters. Therefore, I am not convinced of the merits of these amendments and I do not proposed to accept them.
The earnings threshold of €20,000 was decided upon after careful consideration and public consultation. This is all about striking a balance between savings and impoverishment. However, recognising that some workers, under this threshold, may want to participate in the scheme there will be an option for those earning under €20,000 to opt in to the system.
Regarding the lower age threshold, as the draw down age for automatic enrolment will be linked to the State pension age, which is 66 years, this means that members who join automatic enrolment at the age of 23 will have a potential 43 years of savings. It is also important to note that any employee below the age threshold will still have the choice to opt in, if he or she so wishes.
Amendment put and declared lost.
I move amendment No. 38:
In page 45, between lines 5 and 6, to insert the following:
“(3) In making determinations under subsection (1), the Minister shall have due regard, to the need to ensure that persons availing of carers allowance, the one-parent family payment, disability allowance or the working family payment have equitable access to secure pensions.”.
Amendment put and declared lost.
Question proposed: "That section 56 stand part of the Bill."
For my own information I want to inquire about casual workers in restaurant and bar businesses. With summer work for, say, students who are less than 23 years of age, where does automatic enrolment kick in? Can casual workers avail of AE? They might decide to join because they would get the top-up from the Government and the employer's contribution, and people can cash in after a year or whatever. Therefore, it would be of interest for casual workers to opt in on a summer job to help automatic enrolment. An employer might think a casual worker will only work for two or three months, that he or she is getting "X" amount and he or she cannot opt into the scheme. Does an employer have a say? By contrast, there may be a bunch of employees at, say, 17 or 18 years of age or even a little older. Can such people opt in on the first day of employment?
Yes, such people can opt in. Once they opt in their employer has to make the contribution and the State does the top-up. If a person decides to opt out then he or she will only ever get back his or her own contributions.
If they decide to opt out, they will only ever get their own contributions back. The rest stays in the pot. It is their pot and it stays there. When they start working or for whatever reason are back working, then we will opt them in and they will always have the option to come back out again. We will keep getting people to opt in because if I had been asked at 21 or 22 if I wanted to opt into a pension, I would probably have said no, I want the money. This is to encourage people. When you get into the habit of-----
So they do not get it back.
They only get their own contributions back if they opt out after six months. They do not get the rest. It stays in the pot. The pot is safe. The pot stays with them until they retire. Whatever is in the pot is there. That is what is important about this scheme. It will always be there for them.
Question put and agreed to.
Section 57 agreed to.
Amendment No. 39 not moved.
Section 58 agreed to.
Sections 59 to 61, inclusive, agreed to.
SECTION 62
Government amendment No. 40:
In page 47, line 5, to delete “the prescribed procedure” and substitute “this section”.
Amendment agreed to.
Government amendment No. 41:
In page 47, lines 11 and 12, to delete “in accordance with the prescribed procedure”.
Amendment agreed to.
Government amendment No. 42:
In page 47, line 18, to delete “requirements as to:” and substitute the following:
“the procedure for suspending contributions or ending a period of suspension, including requirements as to—”.
Amendment agreed to.
Government amendment No. 43:
In page 47, line 19, to delete “suspend contributions;” and substitute “suspend contributions or end a period of suspension, and”.
Amendment agreed to.
Section 62, as amended, agreed to.
Section 63 agreed to.
NEW SECTION
Government amendment No. 44:
In page 48, to delete lines 21 to 25 and substitute the following:
“64. (1) The Authority shall repay contributions paid by or in respect of a person in such circumstances and in such manner and in accordance with such procedure as shall be prescribed.
(2) The Minister shall make regulations providing for the circumstances in which repayments shall be made by the Authority and the manner and procedure for such repayment and, without prejudice to the foregoing, any such regulations shall in particular make provision for—
(a) the repayment of contributions in the case of any overpayment of contributions for which adjustment is not made in accordance with this Part or regulations made under this Part, and
(b) the making of a repayment where the person to whom it would have been made has died or cannot be traced.”.
Amendment agreed to.
SECTION 64
Government amendment No. 45:
In page 48, to delete lines 31 and 32.
Amendment agreed to.
Section 64, as amended, agreed to.
SECTION 65
Government amendment No. 46:
In page 48, line 35, to delete “by regulations”.
Amendment agreed to.
Section 65, as amended, agreed to.
SECTION 66
Government amendment No. 47:
In page 49, to delete lines 4 and 5 and substitute the following:
“66. (1) The Minister may make regulations providing for any of the following matters:”.
Amendment agreed to.
Government amendment No. 48:
In page 49, between lines 5 and 6, to insert the following:
“(a) the provision to the Authority by an employer, on or before making a payment of emoluments, of information in relation to payments of emoluments and contributions, and any other prescribed information or documents;”.
Amendment agreed to.
Government amendment No. 49:
In page 49, lines 15 and 16, to delete “other than the employee’s employer”.
Amendment agreed to.
Government amendment No. 50:
In page 50, between lines 2 and 3, to insert the following:
“(2) In subsection (1)(b), the reference to employment with the employer, in the case of an employer who pays emoluments on behalf of another person, is a reference to employment with the person on whose behalf the employer pays emoluments.”.
Amendment agreed to.
Section 66, as amended, agreed to.
Section 67 agreed to.
SECTION 68
I move amendment No. 51:
In page 50, between lines 35 and 36, to insert the following:
“(c) provision under which the Authority, the Minister or both Houses of the Oireachtas may instruct the investment management provider to divest from certain portfolios where ethical issues arise,”.
Amendment put and declared lost.
Section 68 agreed to.
SECTION 69
Government amendment No. 52:
In page 51, line 15, to delete “set out in” and substitute “that have effect in accordance with”.
Amendment agreed to.
Amendment No. 53 not moved.
Government amendment No. 54:
In page 51, line 18, to delete “Subject to subsection (7), the” and substitute “The”.
Amendment agreed to.
Government amendment No. 55:
In page 51, line 18, to delete “are:” and substitute “are—”.
Amendment agreed to.
Government amendment No. 56:
In page 51, to delete line 20 and substitute “or 7,”.
Amendment agreed to.
Government amendment No. 57:
In page 51, to delete line 22 and substitute “or 4,”.
Amendment agreed to.
Government amendment No. 58:
In page 51, to delete line 24 and substitute the following:
“2,
such other risk levels as may be prescribed under subsection (4).
(4) The Minister may prescribe risk levels in place of the risk levels set out in subsection (3), provided that at any time—
(a) there are at least 3 prescribed risk levels, and
(b) each prescribed risk level consists of AE provider schemes whose risk rating (within the meaning given by subsection (5) is a number, or within a range of numbers, prescribed.”.
Amendment agreed to.
Government amendment No. 59:
In page 51, to delete lines 25 to 33 and substitute the following:
“(5) For the purposes of this section, “risk rating”, in relation to an AE provider scheme, means the number assigned to the scheme on a scale representing risk from a low of 1 to a high of 7, where the scale and methodology used satisfy the conditions which apply in relation to the scheme under regulations under subsection (6).
(6) The Minister may make regulations prescribing the conditions to be satisfied by a scale and methodology used for the purposes of subsection (5) to indicate the level of risk of AE provider schemes, and different conditions may be prescribed in relation to schemes of different classes.”.
Amendment agreed to.
Government amendment No. 60:
In page 51, line 34, to delete “subsection (5)” and substitute “subsection (6)”.
Amendment agreed to.
Government amendment No. 61:
In page 52, line 5, to delete “of a description”.
Amendment agreed to.
Government amendment No. 62:
In page 52, to delete lines 10 to 16.
Amendment agreed to.
Section 69, as amended, agreed to.
SECTION 70
Government amendment No. 63:
In page 52, line 34, to delete “specified period” and substitute “period specified in the regulations”.
Amendment agreed to.
Question proposed: "That section 70, as amended, stand part of the Bill."
Section 70 prescribes the different risk levels. The Minister spoke about three risk levels. Unless I read it incorrectly, it states in one part that the Minister can set out the risk levels, or is it a board that sets out the risk levels as well? Who has the ultimate authority in deciding low-, medium- or high-risk levels? How low do you go or how high of a risk do you take? How will the risk levels be arrived at? I am sure there will be a strategy in place to do that and I presume there is previous experience in other countries for risk levels that have been taken with this type of thing. Who has the ultimate say in the risk levels? Is it the Government, the Minister or the board?
I thank the Senator. The risk levels are set out in the legislation under section 69. The higher risk rating is 5, 6 and 7. The medium risk rating level is 3 or 4, and the lower risk level is "consisting of AE provider schemes with a risk rating of 1 or 2." The risks are set out with reference to European standards. It is in the legislation and we refer to the European standards.
Question put and agreed to.
Section 71 agreed to.
NEW SECTION
I move amendment No. 64:
In page 53, between lines 24 and 25, to insert the following:
“Cryptocurrency
72. (1) The Authority shall ensure that the assets of a relevant AE provider scheme are not directly or indirectly invested in cryptocurrency or in portfolios which are exposed to cryptocurrencies.
(2) In this section—
“cryptocurrency” means any form of digital currency that is not regulated, and in relation to which encryption techniques are used to regulate the generation of units of currency and verify the transfer of monies.”.
Amendment put and declared lost.
Sections 72 and 73 agreed to.
SECTION 74
Government amendment No. 65:
In page 56, between lines 31 and 32, to insert the following:
“(6) Subject to subsection (5), a word or expression used in this section or section 75 and in subsection (2), (3) or (5) of section 59AB of the Pensions Act 1990 has, unless the context otherwise requires, the same meaning in this section or section 75 as it has in subsection (2), (3) or (5) of section 59AB of the Pensions Act 1990.”.
Amendment agreed to.
Section 74, as amended, agreed to.
SECTION 75
I move amendment No. 66:
In page 56, between lines 36 and 37, to insert the following:
“(b) such provisions referred to in paragraph (a) should be in compliance with obligations under the Fossil Fuel Divestment Act 2018,”.
Amendment put and declared lost.
Section 75 agreed to.
NEW SECTIONS
I move amendment No. 67:
In page 57, between lines 8 and 9, to insert the following:
“Investment in fossil fuel undertakings
76. (1) (a) The Authority shall endeavour to ensure that the assets of an AE provider scheme are not directly invested in a fossil fuel undertaking.
(b) Where the Authority becomes aware that an undertaking in which the assets of an AE provider scheme are directly invested is, or becomes, a fossil fuel undertaking, the Authority shall divest the assets of the relevant AE provider scheme from such investment as soon as practicable.
(2) The Authority shall endeavour to ensure that the assets of a relevant AE provider scheme are not invested in an indirect investment, unless it is satisfied on reasonable grounds that such indirect investment is unlikely to have in excess of 5 per cent of its assets, or such lower percentage as the Minister may prescribe by order made under this section, invested in a fossil fuel undertaking.
(3) Every order made under subsection (2) shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order is passed by either such House within the next 21 days on which that House has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done under the order.
(4) In this section—
“fossil fuel” means coal, oil, natural gas, peat or any derivative thereof intended for use in the production of energy by combustion;
“fossil fuel undertaking” means an undertaking which is—
(a) engaged, for the time being, in the exploration for or extraction or refinement of a fossil fuel where such activity accounts for 10 per cent or more of the turnover of that undertaking, as derived from its most recently published audited financial statements,
(b) a holding undertaking or, as the case may be, a higher holding undertaking of an undertaking of the kind referred to in paragraph (a), or
(c) a holding undertaking or, as the case may be, a higher holding undertaking of undertakings engaged, for the time being, in the exploration for or extraction or refinement of a fossil fuel, where the aggregate turnover of such undertakings accounts for 10 per cent or more of the turnover of the group on a consolidated basis, as derived from its most recently published audited financial statements;
“indirect investment” means an investment of the assets of a relevant AE provider scheme in an investment product or in a collective investment undertaking and includes financial derivative instruments, exchange traded funds or hedge funds;
“turnover” in relation to an undertaking or a group of undertakings means the amount of revenue derived from the provision of goods and services falling within the ordinary activities of the undertaking or group of undertakings, after deduction of—
(a) trade discounts,
(b) value-added tax, and
(c) any other taxes based on the amounts so derived.”.
Amendment put and declared lost.
I move amendment No. 68:
In page 57, between lines 8 and 9, to insert the following:
“Prohibition on investment in munitions companies
76. (1) In accordance with Part 4 of the Act of 2008, the Authority shall not directly or indirectly invest the assets of a relevant AE provider scheme in a munitions company.
(2) Where assets of a relevant AE provider scheme have been directly or indirectly invested in a company which is or becomes a munitions company, the Authority shall divest such assets immediately.
(3) In this section—
“Act of 2008” means the Cluster Munitions and Anti-Personnel Mines Act 2008;
“munitions company” shall be construed as meaning the same as defined in section 11 of the Act of 2008.”.
Amendment put and declared lost.
I move amendment No. 69:
In page 57, between lines 8 and 9, to insert the following:
“Investment in companies operating in occupied territories
76. (1) (a) The Authority shall ensure that the assets of a relevant AE provider scheme are not directly or indirectly invested in an undertaking operating within an occupied territory.
(b) Where the Authority becomes aware that an undertaking in which the assets of a relevant AE provider scheme are directly or indirectly invested is, or becomes, an undertaking operating in an occupied territory, the Authority shall divest the assets of the relevant Fund from such investment as soon as practicable.
(2) In this section—
“occupied territory” means a territory which is occupied within the meaning of the Fourth Geneva Convention, and which has been—
(a) confirmed as such in a decision or advisory opinion of the International Court of Justice,
(b) confirmed as such in a decision of the International Criminal Court,
(c) confirmed as such in a decision of an international tribunal, or
(d) designated as such for the purposes of this Act or any other enactment in a regulation made by the Minister.”.
Amendment put and declared lost.
I move amendment No. 70:
In page 57, between lines 8 and 9, to insert the following:
“Prohibition on investment in undertakings operating without a legal basis
76. (1) (a) The Authority shall ensure that assets of a relevant AE provider scheme are not directly or indirectly invested in undertakings carrying out business in a territory where there is not a legal basis to do so.
(b) Where the Authority becomes aware that an undertaking in which the assets of a relevant AE provider scheme are, or becomes, directly or indirectly invested in an undertaking referred to in paragraph (a), the relevant AE provider shall divest the assets from such investment as soon as practicable.
(c) For the avoidance of doubt, a territory referred to in paragraph (a) shall be construed to mean an occupied territory.”.
Amendment put and declared lost.
Sections 76 to 78, inclusive, agreed to.
NEW SECTION
Government amendment No. 71:
In page 58, to delete lines 8 to 15 and substitute the following:
“79. (1) The Authority shall specify, and publish on a website maintained by or on behalf of the Authority, the requirements for the notification and verification of deaths for the purpose of this Part.
(2) For the purpose of this Part, a death is notified to the Authority when, in a manner that complies with the requirements specified under subsection (1)—
(a) a person authorised to do so by those requirements notifies the Authority of the death, or
(b) the Authority identifies the death in the records of Oifig an Ard-Chláraitheora.
(3) A notification of death referred to in subsection (2)(a) shall be disregarded for the purposes of this Part if the Authority takes the steps to verify the death that comply with the requirements specified under subsection (1), and after doing so is unable to verify it.”.
Amendment agreed to.
Section 79 deleted.
Sections 80 to 84, inclusive, agreed to.
SECTION 85
Government amendment No. 72:
In page 60, lines 4 and 5, to delete “ in the form and manner specified by the Authority”.
Amendment agreed to.
Government amendment No. 73:
In page 60, line 12, to delete “this section” and substitute “subsection (5)”.
Amendment agreed to.
Section 85, as amended, agreed to.
SECTION 86
Government amendment No. 74:
In page 60, lines 35 and 36, to delete “specified period” and substitute “time specified by the Authority”.
Amendment agreed to.
Section 86, as amended, agreed to.
Section 87 agreed to.
SECTION 88
Government amendment No. 75:
In page 61, line 30, to delete “and publish” and substitute “, and publish on a website maintained by or on behalf of the Authority,”.
Amendment agreed to.
Section 88, as amended, agreed to.
SECTION 89
Government amendment No. 76:
In page 62, line 8, to delete “individual” and substitute “person”.
Amendment agreed to.
Section 89, as amended, agreed to.
Section 90 agreed to.
SECTION 91
Government amendment No. 77:
In page 62, line 34, to delete “of an unclaimed balance” and substitute the following:
“entitled to an unclaimed balance, as soon as is practicable after the end of the dormancy period referred to in section 90(1),”.
Amendment agreed to.
Government amendment No. 78:
In page 63, line 9, after “representative” to insert “as soon as is practicable after the end of the dormancy period referred to in section 90(1)”.
Amendment agreed to.
Government amendment No. 79:
In page 63, to delete lines 10 to 13 and substitute the following:
“(3) Where the Authority has a correspondence address for the recipient, a notice under subsection (1) or (2) shall be sent by ordinary post to that address.”.
Amendment agreed to.
Government amendment No. 80:
In page 63, line 15, to delete “participant” and substitute “person”.
Amendment agreed to.
Section 91, as amended, agreed to.
SECTION 92
Government amendment No. 81:
In page 63, line 25, to delete “in the prescribed form” and substitute the following:
“in such form as may be prescribed by the Minister with the consent of the Minister for Rural and Community Development”.
Amendment agreed to.
Section 92, as amended, agreed to.
SECTION 93
Government amendment No. 82:
In page 64, lines 8 and 9, to delete “in respect of an unclaimed balance”.
Amendment agreed to.
Section 93, as amended, agreed to.
SECTION 94
Government amendment No. 83:
In page 64, lines 22 and 23, to delete “correspondence address” and substitute “the correspondence address, if any, of the participant”.
Amendment agreed to.
Government amendment No. 84:
In page 64, line 36, to delete “participant” and substitute “applicant under that section”.
Amendment agreed to.
Government amendment No. 85:
In page 64, line 37, after “prescribed” to insert “by the Minister with the consent of the Minister for Rural and Community Development”.
Amendment agreed to.
Section 94, as amended, agreed to.
Sections 95 and 96 agreed to.
SECTION 97
Government amendment No. 86:
In page 66, line 4, to delete “he or she” and substitute “the person making the application (referred to in this section as the “applicant”)”.
Amendment agreed to.
Government amendment No. 87:
In page 66, line 6, to delete “claimant” and substitute “applicant”.
Amendment agreed to.
Section 97, as amended, agreed to.
Sections 98 to 100, inclusive, agreed to.
SECTION 101
Government amendment No. 88:
In page 67, line 16, after “Subject” to insert “to this section and”.
Amendment agreed to.
Government amendment No. 89:
In page 67, line 23, to delete “a communication is made available to a person” and substitute “a communication made by the Authority to any person is made available to that person”.
Amendment agreed to.
Government amendment No. 90:
In page 67, to delete lines 28 to 30 and substitute the following:
“(c) where required by subsection (4), a notification that a communication is available to view on the electronic system has been sent to the person in one of the ways referred to in subsection (3).”.
Amendment agreed to.
Government amendment No. 91:
In page 68, to delete lines 4 to 7 and substitute the following:
“(4) A notification referred to in subsection (2)(c) is required to be sent to a person only if the person—
(a) has provided the Authority with an e-mail address or telephone number for the purposes of subsection (3)(a),
(b) has provided the Authority with an address for the purposes of subsection (3)(b),
or
(c) has an agreement with the Authority for the purposes of subsection (3)(c).”.
Amendment agreed to.
Government amendment No. 92:
In page 68, line 8, after “requirement” to insert “to give notice under section 91 or 92 or”.
Amendment agreed to.
Section 101, as amended, agreed to.
Sections 102 and 103 agreed to.
SECTION 104
Government amendment No. 93:
In page 68, to delete lines 26 and 27 and substitute the following:
“104. (1) The Minister may make regulations providing for any of the following matters:”.
Amendment agreed to.
Section 104, as amended, agreed to.
SECTION 105
Government amendment No. 94:
In page 69, line 27, to delete “prescribed”.
Amendment agreed to.
Government amendment No. 95:
In page 69, line 29, to delete “prescribed”.
Amendment agreed to.
Government amendment No. 96:
In page 69, line 31, to delete “prescribed”.
Amendment agreed to.
Government amendment No. 97:
In page 70, to delete line 21 and substitute the following:
“(6) The Minister may make regulations specifying—
(a) the nature of the information referred to in any of paragraphs (a) to (f) of subsection (2) which is to be included in an annual statement,”.
Amendment agreed to.
Section 105, as amended, agreed to.
Sections 106 to 113, inclusive, agreed to.
SECTION 114
Government amendment No. 98:
In page 75, line 5, to delete “or the employer of the members” and substitute “, or an employer any of whose employees are members,”.
Amendment agreed to.
Government amendment No. 99:
In page 75, line 8, to delete “or the employer of contributors” and substitute “, or an employer any of whose employees are contributors,”.
Amendment agreed to.
Government amendment No. 100:
In page 75, line 10, to delete “or the employer of the members” and substitute “, or an employer any of whose employees are members,”.
Amendment agreed to.
Government amendment No. 101:
In page 75, line 13, to delete “or the employer of contributors” and substitute “, or an employer any of whose employees are contributors,”.
Amendment agreed to.
Government amendment No. 102:
In page 76, to delete line 26 and substitute the following:
“(10) The Minister may make regulations in relation to the procedures for the conduct of reviews under this section, which may include procedures relating to the time limits for the deciding of reviews under subsection (4) and the giving of notices under subsection (6).”.
Amendment agreed to.
Section 114, as amended, agreed to.
Section 115 agreed to.
SECTION 116
Government amendment No. 103:
In page 77, to delete lines 1 to 4 and substitute the following:
“(2) An appeal under this section—
(a) shall be sent to the reviewer,
(b) shall state the reasons for the appeal, and
(c) shall be in a form that complies with, and be accompanied by such documents as may be specified in, any requirements published by the Authority on a website maintained by or on behalf of the Authority.”.
Amendment agreed to.
Section 116, as amended, agreed to.
Section 117 agreed to.
SECTION 118
Government amendment No. 104:
In page 79, line 12, to delete “in accordance with Part 3”.
Amendment agreed to.
Government amendment No. 105:
In page 79, between lines 15 and 16, to insert the following:
“(3) Contributions payable under subsection (2)(b) shall be paid in accordance with the procedure specified by the Authority and published by it on a website maintained by or on behalf of the Authority.”.
Amendment agreed to.
Section 118, as amended, agreed to.
Section 119 agreed to.
SECTION 120
Government amendment No. 106:
In page 81, between lines 25 and 26, to insert the following:
“(2) In this Part—
(a) references to participating in the automatic enrolment retirement savings system are references to—
(i) making an application under section 53(1) or (3), or
(ii) being or continuing to be a contributing participant, including by a decision—
(I) not to make an application under section 54, or
(II) not to suspend contributions under section 62, and
(b) references to contributions payable by an employer, or which an employer is liable to pay, include employer contributions and participant contributions.”.
Amendment agreed to.
Section 120, as amended, agreed to.
Section 121 agreed to.
SECTION 122
Government amendment No. 107:
In page 83, between lines 29 and 30, to insert the following:
“ “employer”, in a case where emoluments are paid on behalf of another person, includes a reference to that other person;”.
Section 122, as amended, agreed to.
Sections 123 to 126, inclusive, agreed to.
SECTION 127
Government amendment No. 108:
In page 87, to delete lines 26 and 27 and substitute “participating or proposing to participate in the automatic enrolment retirement savings system”.
Amendment agreed to.
Government amendment No. 109:
In page 88, between lines 14 and 15, to insert the following:
“(4) In this section, “employer”, in a case where emoluments are paid on behalf of another person, includes a reference to that other person.”.
Amendment agreed to.
Section 127, as amended, agreed to.
SECTION 128
I move amendment No. 110:
In page 88, between lines 17 and 18, to insert the following:
“(2) Where it appears to the Revenue Commissioners from information available to them that an employer is making no payment of enrolments and contributions for the benefit of employees to a qualifying occupational pension scheme, qualifying PRSA or qualifying trust RAC, the Commissioners may share that information with the Authority and with a specified body.”.
Amendment, by leave, withdrawn.
Section 128 agreed to.
NEW SECTION
I move amendment No. 111:
In page 88, between lines 17 and 18, to insert the following:
“Hindering the displacement of occupational pension schemes
129. Where a qualifying occupational pension scheme is in place on date on which this Act comes into operation, the employer concerned shall not freeze or wind up the scheme for a period of at least 10 years from that date.”.
We raised these issues on Second Stage. They relate to the treatment of an existing occupational pension by an employer when auto-enrolment is introduced. The concern is that, over time, there would be a move to wind down the occupational pension scheme that is in place and move to an inferior set of contributions. We are specifically asking the Minister to hardwire our proposal into the legislation - to send a very clear signal - and to make it crystal-clear to employers. I accept that there may be very few who might consider this, but from a workers' perspective we must protect occupational pensions that already exist. We ask that a provision would be put in place to ensure that existing occupational pensions could not be wound up for a period of ten years from the date the Act comes into operation. I am conscious that this has already been raised in the Dáil but I would like to place on the record of the Seanad that the Labour Party takes this issue extremely seriously. We want greater pension coverage and adequacy in this country. We do not want to see what would effectively be a substitution effect taking place where occupational pensions already exist. We want to see an expansion of the system. We ask the Minister to consider amendment No. 111.
Sinn Féin fully supports this amendment. From my time as a trade union official, I have a fear that there will be an extensive withdrawal of private pension schemes by employers.
As it is now 9 p.m., I am required to put the following question in accordance with the order of the Seanad of this day: "That amendment No. 111 is hereby negatived in committee; section 129, as amended, is hereby agreed to in committee; the Government amendments undisposed of are hereby made to the Bill; in respect of each of the sections undisposed of, the section or, as appropriate, the section, as amended, is hereby agreed to in committee; the Title is hereby agreed to in committee; the Bill, as amended, is accordingly reported to the House; Fourth Stage is hereby completed; the Bill is hereby received for final consideration; and the Bill is hereby passed."
On a point of order, because of the division, surely we could afford the Minister the opportunity to at least respond to the amendment.
I am only going by the orders agreed by everybody in the House in this morning. I take into account what the Senator said on the voting.
I am sure the Minister would only take a minute, to be fair.
I understand, but that is the order of the House, which everybody agreed to this morning.
Question put.
Vótáil.
Will the Senators claiming a division please rise?
Senators Paul Gavan, Marie Sherlock and Fintan Warfield rose.
As fewer than five Members have risen, I declare the question carried. In accordance with Standing Order 61, the names of the Senators dissenting will be recorded in the Official Report and the Journal of the Proceedings of the Seanad.
Question declared carried.
When is it proposed to sit again?
Tomorrow at 9.30 a.m.
Cuireadh an Seanad ar athló ar 9.15 p.m. go dtí 9.30 a.m., Déardaoin, an 20 Meitheamh 2024.
The Seanad adjourned at 9.15 p.m. until 9.30 a.m. on Thursday, 20 June 2024.