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Pension Provisions

Dáil Éireann Debate, Wednesday - 23 October 2019

Wednesday, 23 October 2019

Questions (199, 200)

Michael McGrath

Question:

199. Deputy Michael McGrath asked the Minister for Employment Affairs and Social Protection the position on the roll-out of auto-enrolment in the area of private pensions; the timeline for same; and if she will make a statement on the matter. [43723/19]

View answer

Michael McGrath

Question:

200. Deputy Michael McGrath asked the Minister for Employment Affairs and Social Protection the reforms she plans to introduce in the area of private pensions with a view to improving coverage; and if she will make a statement on the matter. [43724/19]

View answer

Written answers

I propose to take Questions Nos. 199 and 200 together.

Over the past 20 years Ireland's supplementary pension coverage rate has remained stubbornly low.  The most recent CSO data relates to 2018 and this reports that only 47% of the working population have supplementary pensions.  It is estimated that this rate reduces to just 35% when the private sector is considered in isolation.  Therefore, if measures are not taken to address this low rate of supplementary coverage, many future retirees will experience unwanted reductions in living standards when they reach retirement.

As stated in the 'The Roadmap for Pensions Reform', the Government proposes to begin implementation of a supplementary retirement savings system, known as Automatic Enrolment, by 2022.  Automatic Enrolment will see a transition from the current and purely voluntary system to one which will, subject to certain parameters, automatically enrol employees into a quality assured retirement savings system.  The saver will maintain the freedom of choice to opt-out.

An extensive national public consultation process on Automatic Enrolment finished earlier this year.  I was pleased to launch 'A Strawman Public Consultation Process for an Automatic Enrolment Retirement Savings System in Ireland' in August 2018 as the basis for this consultation.  This set out a plausible approach to the design of an automatic enrolment system for Ireland, with the intention of generating discussion and improving ideas.  I also chaired a series of consultation seminars around the country, in Dublin, Galway and Cork.  In March, my Department and the Pensions Authority held a series of focus groups with the target population for automatic enrolment.  My officials continue to regularly meet with various stakeholders and representative groupings.

My Department has completed analysis of the substantial material collated from the consultation process, in order to determine how the feedback received may assist with the design process.  The ESRI has completed research we commissioned on the economic impacts of introducing Automatic Enrolment.  My Department is continuing its research and consultation with experts from around the world to further build the evidence base in a number of specific areas over the coming months. 

The Cabinet Committee on the Economy was recently updated on progress with the design of the Automatic Enrolment system including an overview of findings from the consultation process and the ESRI's macroeconomic impact assessment.  A Report on the matter will be brought to Government for consideration in the coming weeks to facilitate the next steps for implementation of the scheme.

I hope this clarifies the matter for the Deputy.

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