Dáil Éireann Debate, Thursday - 14 July 2022
123. Deputy Niamh Smyth asked the Minister for Social Protection if she will provide an update on auto enrolment; when the draft legislation is expected to be published; and if she will make a statement on the matter. [34929/22]
View answerIn March I announced that Government approval had been given to the final design principles for the auto-enrolment (AE) retirement savings system. A detailed explanatory paper on the new system has been published on www.gov.ie.
The system is expected to become operational in early 2024, and will automatically enrol approximately 750,000 employees at the outset. These are employees who are aged between 23 and 60 years, earning over €20,000 across all their employments, and who are not already enrolled in an occupational pension scheme.
Contributions will be paid by employees through a payroll deduction and matched by their employers. Contributions will be calculated as a percentage of the employee’s gross income from employment; starting at 1.5% and rising every three years to a maximum of 6% by year 10 onwards. The State will also contribute a top-up financial incentive at a rate of €1 for every €3 saved by the employee.
A new Central Processing Authority will be set up to administer the system. This will almost entirely eliminate any administrative burden on employers and will facilitate a ‘pot-follows-member’ approach whereby workers will have one growing pension pot across employments and throughout their working life.
Commercial registered providers of financial investment services, contracted following an open tender process, will provide a well-balanced and diversified default investment fund, plus three other fund options for employees who want to invest their money at different levels of risk.
The implementation phase is well underway, with a project team in the Department of Social Protection progressing a range of elements in the overall plan. This work includes the preparation of a general scheme of a bill to establish the automatic enrolment system on a statutory basis.
To this end, I intend to bring a Memo to Government shortly seeking approval for the drafting of this legislation as a matter of priority, with a view to introducing the draft bill into the Oireachtas later this year.
I hope this clarifies matters for the Deputy.
