Dáil Éireann Debate, Tuesday - 23 May 2023
90. Deputy Thomas Pringle asked the Minister for Social Protection if she is satisfied that the automatic enrolment pension system being proposed by Government can stay below the 0.5% maintenance costs proposed in the scheme; and if she will make a statement on the matter. [22107/23]
View answerThe introduction of an automatic enrolment (AE) system is a Programme for Government commitment and a key priority for me as the Minister for Social Protection. Under AE, employees will have access to a savings scheme, co-funded by their employer and the State. For every €3 a worker pays into it, they'll have another €4 credited to their account. The contributions will then all be invested, with members holding their own individual retirement savings accounts that they can drawdown when they retire. Implementation of the AE system is well underway, with the first enrolments expected in 2024.As Minister, I am keenly aware of the need to keep costs in the AE system low and transparent for its participants. A core objective for AE is to provide quality assured investment services for retirement savings at low cost to AE participants. This is especially true given that a large proportion of the initial 800,000 employees in the AE target population are lower and medium income earners.The AE system will be managed and overseen by a Central Processing Authority. As provided for in the final design of the AE system, an annual administration and investment management charge of up to 0.5% of assets under management will be set as a target to be achieved by the CPA. This will be achieved via tendering for services and by utilising economies of scale as the system grows. My Department and the CPA will work to ensure that fees are as close as possible to 0.5% of the value of the assets under management over the medium to long term and that costs are shared fairly among the participants.I hope this clarifies the matter for the Deputy.
