Dáil Éireann Debate, Tuesday - 26 July 2022
1262. Deputy Richard Bruton asked the Minister for Social Protection if she has set a start date for the auto-enrolment of those with no employer pension into a pension top-up scheme; the initial rate at which contributions will be set; and the implementation milestones involved. [40979/22]
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 as a percentage of the employee’s gross income from employment. Initially, contributions will be set at a rate of 1.5% for both employee and employer. These contributions will increase by 1.5% every three years until reaching 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.
The timeline for delivery was published in the final design document, and includes the following milestones:
|
Establish CPA on administrative basis with Department of Social Protection |
Q2 – Q3 2022 |
|
Legislative Heads of Bill drafted and Government approval |
Q3 – Q4 2022 |
|
Legislation enacted |
Q3 2023 |
|
CPA organisation established on statutorily independent basis |
Q4 2023 |
|
Completed development/procurement of initial IT system/infrastructure |
Q4 2023 |
|
Procurement of investment managers completed |
Q4 2023 |
|
Commencement of automatic enrolments |
Q1 2024 |
The implementation phase is now well underway, with a project team in the Department of Social Protection progressing a range of individual elements of a detailed project plan. This work includes the preparation of a General Scheme of a Bill to establish the automatic enrolment system on a statutory basis. I intend to bring a Memo to Government shortly to seek approval for the drafting of this legislation with a view to introducing the draft bill into the Oireachtas later this year.
I hope this clarifies matters for the Deputy.
