I propose to take Questions Nos. 31, 35, 65 and 70 together.
The Programme for Government commits to introducing a pensions automatic enrolment (AE) system. The objective of this commitment is to address the low proportion of employees in Ireland with supplementary pension cover, which includes both occupational and personal pensions.
According to CSO figures, the rate of supplementary pension coverage is around 55% of the working population (Pension Coverage Survey 2020). It is estimated that this reduces to less than 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.
This Government, recognising the exceptional strain that both employers and employees are under as a result of the COVID-19 emergency, will seek to gradually deliver an AE system based on the following principles:
- There will be a phased roll-out, over a decade, of the contributions made by workers and employers.
- Matching contributions will be made by both workers and employers and the State will top up those contributions.
- There will be an opt-out provision for those who choose to opt out.
- Workers will have a range of retirement savings products to choose from.
- There will be a charges cap imposed on pension providers. My Department is currently working on finalising a proposal for Government on the overall design of the AE system. As set out in the Economic Recovery Plan 2021, it is hoped that the design can be completed by the end of this year. Thereafter, it is intended that the necessary legislative, organisational and process structures will follow over the course of 2022 and 2023.
I hope this clarifies the matter for the Deputies.