I propose to take Questions Nos. 1524 and 1525 together.
The Programme for Government contains a commitment to introduce the Automatic Enrolment (AE) Retirement Savings System. The aim of introducing AE is to address the pension coverage gap that exists in Ireland and to provide workers with greater comfort and security regarding their retirement income. The new system - to be known as My Future Fund - commenced on the 1 January 2026.
The administration fees associated with My Future Fund have been set out in regulation following consultation with the Chief Executive Officer of the National Automatic Enrolment Retirement Savings Authority (NAERSA) and the Minister for Public Expenditure, Infrastructure, Public Services Reform and Digitalisation. The fee was calculated on the basis of a detailed financial model based on likely participation levels in My Future Fund and the operating costs of NAERSA.
The administration fee will take the form of a flat weekly fee rather than a 'commission' based on a percentage of funds under management. In this way the administration fee will reflect the actual costs of administration (which do not vary with fund size), will be same for all participants regardless of their income or the size of their retirement fund, and will, ultimately, prove much better value for money for the participant over the course of a standard retirement planning horizon.
A fee equivalent to 55c per week will be charged each time contributions are paid to a participant's fund, up to a maximum of €28.60 a year. If a participant is not currently making contributions, for example if they have opted out, suspended, have joined an occupation pension scheme or are not currently receiving pay, the administration fee will not be charged.
In addition to the administration fee, there will be a fee for the investment management services, paid through a percentage charge on assets under management. These services have been procured through a competitive procurement process and will average at just under 0.04% of assets under management.
Over the typical life of a retirement saving plan for an average-income employee, the combined administration and investment management fees are less than the 0.5% target set by the Government and are less than the rate of 1% of assets and 3 – 5% of contributions which is the norm for many personal retirement saving schemes. I am therefore satisfied that these costs represent excellent value for participants.
I hope this clarifies matters for the Deputy.