Léim ar aghaidh chuig an bpríomhábhar
Gnáthamharc

Pensions Reform

Dáil Éireann Debate, Wednesday - 29 July 2020

Wednesday, 29 July 2020

Ceisteanna (30)

John Lahart

Ceist:

30. Deputy John Lahart asked the Minister for Employment Affairs and Social Protection the timeframe for the introduction of a pension auto-enrolment system; and if she will make a statement on the matter. [18961/20]

Amharc ar fhreagra

Freagraí ó Béal (4 píosaí cainte)

I thank the Ceann Comhairle for facilitating me. I ask the Minister about the timeframe for the introduction of a pension auto-enrolment system. She might make a statement and give some additional details on that topic.

I thank the Deputy for raising this matter. Compared with other countries in the OECD, the proportion of employees in Ireland with supplementary pension cover is low, with just over 50% of the working population having an occupational or personal pension.  This rate reduces to 35% when the private sector is considered in isolation.  As a consequence of this low supplementary pension coverage rate, many retirees may suffer an unwanted reduction in living standards when they retire.

To address this low coverage rate, a system of automatically enrolling employees into a quality assured retirement savings plan, with freedom of choice to opt-out, has been progressed by previous Administrations. Although A Roadmap for Pensions Reform 2018-2023 provided for the development and implementation of an automatic enrolment, AE, retirement savings system by 2020, this Government recognises the exceptional strain that both employers and employees are now under as a result of the Covid-19 emergency. 

The Department of Employment Affairs and Social Protection continues to work on the design of the AE system.  There are five main areas where work is ongoing so as to produce design options for Government to consider.  These areas relate to: the scope and role of the central processing authority; the nature and functions of the registered providers; the investment framework and funds to be offered by registered providers, including the design of the default fund and the pay-out phase; the design of the State financial incentive; and the phasing of implementation.

In progressing this work, the Department is receiving technical support from the European Commission’s DG Reform, which assists EU member states implementing administrative and institutional reforms. I hope this clarifies the matter for the Deputy.

I thank the Minister for the reply. The Minister stated that she was aiming for 2022 but because of the strain that both employers and employees are now under as a result of Covid-19 she is implying, without actually saying it, that the date will extend beyond that. Could she be more specific as to when we can anticipate that auto-enrolment scheme to be introduced?

A Roadmap for Pensions Reform 2018-2023 provided for the development and implementation of the auto-enrolment retirement scheme by 2022.

This Government recognises the exceptional strain that both employers and employees are now under as a result of the Covid-19 emergency. The Government will, therefore, seek to gradually deliver the AE scheme, which will include a phased roll-out of contributions over a ten-year period. A phased introduction of the system is believed to be achievable in the current situation. It is widely recognised by many stakeholders in the public consultation process that full implementation of the AE scheme by 2022 was extremely ambitious. The AE programme management office in my Department will work on developing options for the Government to consider in order that the system can be introduced on a phased basis. Until decisions have been made on these options, it is not possible to give a more detailed timeline for the introduction of the AE scheme.

Barr
Roinn