Éamon Ó Cuív
Question:924. Deputy Éamon Ó Cuív asked the Minister for Social Protection when it is intended to introduce a national auto-enrolment pension scheme for employees; and if she will make a statement on the matter. [1381/22]
View answerWednesday, 19 January 2022
Questions (924, 925)
Éamon Ó Cuív
Question:925. Deputy Éamon Ó Cuív asked the Minister for Social Protection the estimated cost per annum of the State contribution to a national auto-enrolment scheme for employees in each of the first five years when it is introduced; and if she will make a statement on the matter. [1382/22]
View answerWritten answers
I propose to take Questions Nos. 924 and 925 together.
The Programme for Government commits to introducing a pension auto-enrolment (AE) system. The objective of this commitment is to address the low proportion of employees in Ireland with supplementary pension cover, which includes both occupational and personal pensions.
According to CSO figures, the rate of supplementary pension coverage is around 55% of the working population (Pension Coverage Survey 2020). It is estimated that this reduces to less than 35% when the private sector is considered in isolation. As a consequence of this low supplementary pension coverage rate, many retirees may suffer an unwanted reduction in living standards when they retire.
This Government, recognising the exceptional strain that both employers and employees are under as a result of the COVID-19 emergency, will seek to gradually deliver an AE system, based on the following principles:
- There will be a phased roll-out, over a decade, of the contribution made by workers.
- Matching contributions will be made by both workers and employers and the State will top up contributions.
- There will be an opt-out provision for those who choose to opt out.
- Workers will have a range of retirement savings products to choose from.
- There will be a charges cap imposed on pension providers.
My Department is currently finalising a proposal for Government on the overall design of the AE system and I intend to bring that to Government for consideration shortly. As a Government decision has not yet been made in respect of the nature, form and value of the State's top-up to employees' contributions to the AE system, it is not possible to detail the estimated cost per annum of such a financial incentive at this time. My Department will be happy to do so in due course once Government has made decisions.
Once the final design is agreed it is intended that the necessary legislative, organisational and process structures will follow over the course of this year and next, as set out in the Economic Recovery Plan 2021.
I hope this clarifies the matter for the Deputy.
Question No. 925 answered with Question No. 924.