Dáil Éireann Debate, Thursday - 22 January 2026
431. Deputy Michael Murphy asked the Minister for Social Protection to provide a detailed breakdown of the full establishment costs of the auto-enrolment retirement savings system, including but not limited to legislative development, ICT systems, procurement, branding, public communications, and staffing costs; the projected total Exchequer cost over the first five and ten years of operation.; and if he will make a statement on the matter. [5403/26]
View answer432. Deputy Michael Murphy asked the Minister for Social Protection whether any assessment has been carried out of the all-in economic cost of an individual auto-enrolment account, including indirect and non-member-borne costs funded by the Exchequer; if so, to publish same.; and if he will make a statement on the matter. [5404/26]
View answer435. Deputy Michael Murphy asked the Minister for Social Protection the projected annual operating costs of the National Automatic Enrolment Retirement Savings Authority, including staffing, governance, compliance, and outsourced services; and to confirm the way in which these costs will be funded. [5407/26]
View answer436. Deputy Michael Murphy asked the Minister for Social Protection the oversight mechanisms which are in place to ensure that National Automatic Enrolment Retirement Savings Authority delivers value for money over time; and whether periodic independent cost and performance reviews are planned. [5408/26]
View answer439. Deputy Michael Murphy asked the Minister for Social Protection the assessment which has been made of the long-term financial exposure of the Exchequer arising from the auto-enrolment scheme, including risks related to cost overruns, lower-than-expected participation, or higher-than-expected administrative costs. [5411/26]
View answer440. Deputy Michael Murphy asked the Minister for Social Protection whether his Department has identified circumstances in which the auto-enrolment scheme could require additional Exchequer subvention beyond current projections; and the safeguards in place to prevent this. [5412/26]
View answerI propose to take Questions Nos. 431, 432, 435, 436, 439 and 440 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 access to a quality assured retirement savings scheme, thereby giving greater comfort and security regarding their retirement income.
The new system - known as My Future Fund - commenced on the 1 January 2026. Over 763,000 employees that weren't actively contributing to a qualifying pension or PRSA through payroll were eligible and were automatically enrolled in My Future Fund. The scheme is managed by a new statutory body, the National Automatic Enrolment Retirement Savings Authority (NAERSA), which operates under the aegis of my Department.
The establishment and implementation of the AE system has been one of my Department's largest multi-annual projects, the costs for which have been met though the Department's administrative budget. The implementation project also involved support from a wide range of other State bodies, including the Revenue Commissioners, the Attorney General's Office, the Chief State Solicitor's Office., the Office of Public Works, the Central Statistics Office, the Public Appointments Service, the National Shared Services Office, the Department of Finance, the Department of Enterprise, Tourism and Employment, and the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation. Given this multi-agency approach over a number of years, a detailed breakdown of the full establishment costs of the AE system is not available.
My Future Fund is designed to be self-financing based on administration fees paid by all contributing participants and consequently the operation and continued development and evolution of the system will not require Exchequer expenditure. While seed funding is being provided to NAERSA to cover its initial set up costs, this will be repaid through an appropriation-in-aid approach when the administration fees generate a surplus income. This administration fee has been set at at 55 cents per week on the basis of a detailed financial model on likely participation levels and operating costs, which took into account the sensitivity of these variables to change.
With regard to NAERSA's budget, a contract was signed on 9th October 2024 with Tata Consultancy Services (TCS) for the provision of a managed service to administer the AE system on behalf of NAERSA. The cost of this contract will be in the region of €100 million to €150 million over 10 to 15 years. NAERSA's annual staffing and corporate costs are estimated to be in the region of €10 million per annum.
With regard to the State's costs in My Future Fund, these relate to the State 'top-up' to participants' contributions, which will be provided at a rate of €1 for every €3 saved by the employee. This State top-up is being provided instead of tax relief on contributions, as is the case with occupational and private pension arrangements. The projected costs of the State top-up over the next 10 years is set out in the Table below.
|
Year |
Top-Up Rate as a % of Gross Income |
State top-up |
|
2026 |
1.5% |
€154 million |
|
2027 |
1.5% |
€162 million |
|
2028 |
1.5% |
€170 million |
|
2029 |
3% |
€353 million |
|
2030 |
3% |
€365 million |
|
2031 |
3% |
€378 million |
|
2032 |
4.5% |
€587 million |
|
2033 |
4.5% |
€608 million |
|
2034 |
4.5% |
€628 million |
|
2035 |
6% |
€865 million |
In relation to the oversight of My Future Fund, NAERSA will be overseen by a Board which will consist of up to eight members from a range of relevant and expert backgrounds. In addition, the Comptroller and Auditor General will audit and report on the accounts and operations of NAERSA in terms of efficiency and compliance with legal obligations. Furthermore, NAERSA's Chief Executive will be accountable in the performance of this body's functions to the Board of NAERSA and also to the Oireachtas and its Committees, including the Public Accounts Committee. Finally, the Pensions Authority will prepare an annual supervisory report on NAERSA's governance of the system and the operation and effectiveness of the Automatic Enrolment Retirement Savings System Act 2024, helping to ensure that the best interests of My Future Fund participants will be safeguarded and supported to the highest degree.
I hope this clarifies matters for the Deputy.
