Dáil Éireann Debate, Wednesday - 6 November 2019
201. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection if her plans for auto-enrolment will include an early drawdown option for a mortgage deposit; and if she will make a statement on the matter. [45597/19]
Amharc ar fhreagraI am pleased that the Government recently approved significant elements of my design for an automatic enrolment retirement savings system. These include key decisions in relation to the target membership, the contribution rates, the policies in relation to opting-out and re-enrolment, the administrative arrangements and organisational approach and the investment options.
As stated in the 'The Roadmap for Pensions Reform', the Government proposes to begin implementation of a supplementary retirement savings system, known as Automatic Enrolment (AE), by 2022. AE will see a transition from the current and purely voluntary system to one which will, subject to certain parameters, automatically enrol employees into a quality assured retirement savings system. The saver will maintain the freedom of choice to opt-out.
In relation to an early drawdown option for a mortgage deposit, while such an approach may appear reasonable and improve the attractiveness of AE for some people, the core policy objective of AE is to ensure adequate retirement savings. Therefore, facilitating early access to pension savings could potentially compromise overall retirement adequacy. In this regard, it is worth bearing in mind that early access to pension funds for house deposits or for other similar reasons is not currently possible for those with existing supplementary pensions in Ireland.
Given that allowing people to access their pensions early is contrary to achieving the policy goal of pension adequacy, the Government has decided that a limited number of ‘Savings Suspension periods’ will be facilitated in the AE system for members who wish to temporarily cease making contributions. These savings suspension periods could be used when a person wishes to save for a house deposit, for instance. In such cases, employer and State contributions will also cease.
I hope this clarifies the matter for the Deputy.
