Dáil Éireann Debate, Tuesday - 3 October 2023
394. Deputy Richard Bruton asked the Minister for Social Protection the current estimated date for the commencement of the provision which would see auto-enrolment for a pension top-up; if the phasing arrangements are planned for the introduction of same and if she will outline the detail. [42140/23]
View answerThe introduction of an Auto Enrolment Retirement Savings System is a Programme for Government commitment, and a key priority for me as Minister for Social Protection.
Last year, I published 'The Design Principles for Ireland’s Automatic Enrolment Retirement Savings System', which set out the new system in detail. Implementation of the AE system has been gathering pace since then, with the first enrolments expected in the latter half of 2024.
A dedicated project team in the Department of Social Protection is solely focused on implementing the agreed design, including by drafting the necessary legislation that will underpin it, designing the organisational structures and the technical system to operate it, and communicating this landmark reform to stakeholders and the public.
It is my intention to publish the AE Bill during this current session of the Dáil, with initiation of its passage through the Oireachtas immediately thereafter. This will be a major milestone in progressing towards the implementation of AE.
Work also continues on putting the administrative and operational processes in place, in order to ensure that contributions in the AE system can commence in 2024. In this context, a phasing arrangement, such as enrolment by cohorts of participants by size of employers, as happened in the UK for example, is not currently envisaged.
Where a phasing approach will be adopted is in the setting of the contribution rates. Here the rates for employers and employees will start out at 1.5% of gross salary, rising by 1.5 percentage points every three years, and reaching the full rate of 6% for both in year 10. This will be topped up by the State at a rate of €1 for every €3 that the employee contributes. For employees, the phasing in of contribution rates on a staged basis will allow time for the contribution rate to 'bed in' and earnings to adjust before the next increase. For employers, this approach gives very clear certainty as to the rates that will be applicable so as to facilitate the gradual absorption of these labour costs, thereby easing the burden on employers in implementing this reform.
I hope this clarifies the matter for the Deputy.
