The introduction of an automatic enrolment (AE) retirement savings system is a Programme for Government commitment and a key priority for me as Minister for Social Protection. Implementation of the AE system is well underway, with the Automatic Enrolment Retirement Savings System Bill 2024 now having completed Second Stage in the Dáil and a tender process to contract for administration services being well advanced. Enrolment of the first participants is expected to commence in January 2025.
The Deputy will be familiar with the analysis contained within the Regulatory Impact Assessment that accompanied the General Scheme of the Bill when it was approved by Government in July 2022. In line with that document, I should clarify that the AE scheme is not predicated on there being a particular number of workers enrolled; rather, 750,000-800,000 employees is the current estimated number of workers who will meet the eligibility criteria for AE when it launches next year. This estimate is based on data provided by the Revenue Commissioners.
AE has some unique features, but insofar as it is comparable to other quasi-mandatory pension schemes around the world, we can be confident that opt-out rates will be low. When conducting costings and financing estimates, my departmental officials typically assume a 90% adherence rate for AE participants. This is partly due to the UK comparator, which, as I understand it, has a current opt-out rate of 10.4%. Given that the AE scheme is a very attractive offering for participants, I expect that the opt-out rate will be even lower in Ireland.
I hope this clarifies matters for the Deputy.
