Dáil Éireann Debate, Wednesday - 17 April 2024
84. Deputy Fergus O'Dowd asked the Minister for Social Protection to respond to concerns raised in respect of the Automatic Enrolment Retirement Savings System Bill 2024 (details supplied); and if she will make a statement on the matter. [16982/24]
View answerI arranged for an in-depth consideration of the alternative AE proposal referred to by the Deputy. While my own officials looked at it carefully, I also referred it to the independent Pensions Council for its assessment.
The Pensions Council is an independent statutory body of pension experts drawn from the legal and financial world and its statutory role is to advise me on what it understands to be the best way forward in terms of providing a pensions landscape in Ireland.
While the Council acknowledged some positive aspects of the proposal in its report published on 3rd April 2024 on its website, it ultimately could not recommend it to me as a better alternative to the already agreed AE design.
The Council has found several shortcomings with regard to the technical and practical feasibility of the proposal, and a lack of supporting evidence for it. In short, the proposal is untried, untested and unproven in any other pension system or jurisdiction.
I, as Minister for Social Protection with responsibility for driving forward the auto-enrolment project, cannot pull AE participants into an untested investment model. I cannot take risks with participants' money, most of whom with be low to middle income earners, on an unproven approach and against the advice of the Pensions Council.
Furthermore, no investment is risk free, but even if the alternative proposal presented a lower risk overall, it allows no flexibility whatsoever for participants. It would lock them into permanent participation in a savings scheme that invests their money on the stock market with no option to suspend participation for any length of time or to opt-out. In addition, the alternative proposal does not provide participants with a choice in respect of the risk they are willing to undertake with their investment. I do not believe that these are constraints the participants themselves would find acceptable.
In view of these matters, and the advice provided to me, I intend to press ahead with the design agreed by Government in March 2022, the implementation of which is now well advanced.
I trust this clarifies matters for the Deputy.
