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 Committee 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.
Enrolment into the scheme will be based on age and earnings thresholds, together with whether or not an employee is currently covered by a supplementary pension savings arrangement. The employment status of an individual (e.g., whether the employee is full-time or part-time) will not be a determining factor in enrolment determinations, i.e. a person working part-time may be automatically enrolled.
The AE system will be a highly automated, payroll-based system that will operate on the basis of deductions from employees' earnings, transmitted to the new National Automatic Enrolment Retirement Savings Authority (NAERSA) by employers through their payroll systems. Where an employer continues to pay an employee while they are on leave, contributions from the employee and the employer will continue to be made and topped up by the State. However, periods of unpaid leave from employment, for whatever reason, are not covered by the system.
Similar challenges prevail in the current supplementary pension system (i.e. in either occupational or private pension schemes), which continues to be the root cause of the gender pension gap. Ireland is not unique in this sense as the same problem is experienced in all other OECD countries to different extents. Accordingly, it isn't possible for the new AE system to provide a comprehensive solution to issues relating to maternity cover and the gender pension gap, alone among all other pension funds, and at the outset of the system's existence. Nevertheless, it is envisaged that the new Authority will investigate ways to implement a mechanism to make up for periods of unsalaried leave once the AE system has bedded down, and within the broader context of pensions policy more generally.
Finally, it should be noted that the State’s record on maternity cover is already very good when the State Pension provisions and other social welfare payments are taken into account with ESRI research on gender, pension and income in retirement finding no consistent evidence of a gender State Pension gap.
I hope this clarifies matters for the Deputy.
