Dáil Éireann Debate, Thursday - 25 May 2017
149. Deputy Willie O'Dea asked the Minister for Social Protection his plans for an auto enrolment pension system; the progress made to date on developing such a system; the cost implications of same; and if he will make a statement on the matter. [25240/17]
View answerI have made pension reform a priority for my term as Minister for Social Protection. To this end I can confirm my intention to publish and commence the implementation of an Action Plan for the reform of pensions over the coming months.
In Ireland there is a significant retirement savings gap which sees just 35% of private sector workers with retirement savings to supplement the State pension. Therefore, and in addition to a range of other long term reform measures, this Action Plan will detail proposals for a transition from the current and purely voluntary supplementary pension system to one which will automatically enrol eligible employees into a quality assured retirement savings system. This reform, where the saver will maintain the freedom of choice to opt-out, will encourage long term saving and asset accumulation amongst those who may otherwise suffer a reduction in living standards at retirement and will increase the well-being, financial security, and independence of future retirees.
Following the publication of this Action Plan and in order to guide future Government decisions, the detailed evidence building and consultation required to deliver automatic enrolment will be undertaken over an initial project planning phase. To this end, and to develop an understanding of potential future expenditure requirements, this evidence building will provide a basis for fundamental choices regarding the preferred operational structure and organisational governance for the system. Decisions around design parameters such as the required contributions, financial incentives and target membership will also impact on expenditure requirements. Correctly positioning/designing each of these parameters will be fundamental to the success of any system.
Subject to any Government decision regarding the manner in which this project should be progressed, it is my objective that first members would be enrolled in the new system in 2021. This project timeframe reflects the scale of such a programme and its importance as being the most fundamental reform of the Irish supplementary pension system in generations.
I hope this clarifies the matter for the Deputy.
