Social Welfare Schemes

Dáil Éireann Debate, Tuesday - 17 May 2022

Tuesday, 17 May 2022

Ceisteanna (97, 106, 113, 133)

Paul Kehoe

Ceist:

97. Deputy Paul Kehoe asked the Minister for Social Protection if she will provide details on her Department’s new workplace pension scheme; and if she will make a statement on the matter. [24440/22]

Alan Dillon

Ceist:

106. Deputy Alan Dillon asked the Minister for Social Protection if she will provide details on the new Workplace Pension Scheme; if carers will be included; and if she will make a statement on the matter. [24516/22]

Richard Bruton

Ceist:

113. Deputy Richard Bruton asked the Minister for Social Protection the action that is planned to explain and promote the auto-enrolment scheme for a pension top-up. [24507/22]

Niamh Smyth

Ceist:

133. Deputy Niamh Smyth asked the Minister for Social Protection the details of the planned launch of the automatic enrolment retirement saving systems; and if she will make a statement on the matter. [24671/22]

Freagraí scríofa

Minister for Social Protection

I propose to take Questions Nos. 97, 106, 113 and 133 together.

In March I announced that Government approval had been given to the final design principles for the auto-enrolment (AE) retirement savings system. The Deputies may wish to note that a detailed explanatory paper on the new system has been published on www.gov.ie.

The system is expected to become operational in early 2024, and will automatically enrol approximately 750,000 employees at the outset. These are employees who are aged between 23 and 60 years, earning over €20,000 across all their employments, and who are not already enrolled in an occupational pension scheme. Consideration will be given in the future to the feasibility of broadening the system to include those outside the employee cohort, such as carers.

Contributions will be paid by employees through a payroll deduction and matched by their employers as a percentage of the employee’s gross income from employment. The State will also contribute a top-up financial incentive at a rate of €1 for every €3 saved by the employee.

A new Central Processing Authority will be set up to administer the system. This will almost entirely eliminate any administrative burden on employers and will facilitate a ‘pot-follows-member’ approach whereby workers will have one growing pension pot across employments and throughout their working life.

Commercial registered providers of financial investment services, contracted following an open tender process, will provide a well-balanced and diversified default investment fund, plus three other fund options for employees who want to invest their money at different levels of risk.

A lengthy public consultation process was conducted in 2018. Engagement is ongoing between my Department officials and key stakeholders. A comprehensive communications campaign will be conducted in 2023 in advance of the scheme's launch to ensure that employees and employers are aware of and fully understand the details of the scheme.

I hope this clarifies matters for the Deputies.