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Pension Provisions

Dáil Éireann Debate, Tuesday - 22 March 2022

Tuesday, 22 March 2022

Questions (57)

Cathal Crowe

Question:

57. Deputy Cathal Crowe asked the Minister for Social Protection the status of the pensions auto-enrolment system including plans to consult with the general public; and if she will make a statement on the matter. [14834/22]

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Written answers

The Programme for Government commits to introducing a pensions automatic 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 active supplementary pension coverage is around 56% of the working population (Pension Coverage Survey 2021).  It is estimated that this could be as low as 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 and the increases in the cost of living, 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 contributions made by workers and employers.

- Matching contributions will be made by both workers and employers and the State will top up those 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 has finalised a proposal for Government on the overall design of the AE system and I intend to bring that to Government for formal approval towards the end of this month.  The overall design has been informed by a lengthy consultation and development process, including considerable engagement with industry bodies, employer and employee representatives, advocacy groups, as well as members of the public.  This included the "Strawman Consultation" process, which provided stakeholders with the opportunity to share their own thinking on various aspects of the system.

- 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, and in this regard ongoing engagement with key stakeholders will continue to inform the process.

I hope this clarifies the matter for the Deputy.

Question No. 58 answered with Question No. 23.
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