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 MyFutureFund - 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 MyFutureFund.
The charges that are applied to participants in MyFutureFund consist of an administration fee charged on contributions and an investment management fee based on a percentage charge on assets under management.
Firstly, it should be noted that the National Pensions Policy Initiative Report of 1998 to which the Deputy refers represented an assessment of the Irish pension system of that time and therefore its advice cannot be regarded as directed at MyFutureFund when its design was first set out in the Strawman proposal of 2018 and whose statutory basis rests in the Automatic Enrolment Retirement Savings System Act 2024 (AE Act). Secondly, Section 104 of the Pensions Act 1990 (as amended) concerns charges relating to Personal Retirement Savings Accounts (PRSA). These provisions do not apply to MyFutureFund, which has its own fee provisions set out in Section 35 of the AE Act and regulations made thereunder.
The administration fee for MyFutureFund takes the form of a flat weekly fee of 55 cents on contributions 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 only be applied to contributing participants - whereas an AUM approach could result in suspended funds being degraded over time. This administration fee is analogous to the policy fee that some pension providers charge, which in some instances amount to around €50 per annum. It also compares favourably to the 5% of contributions typically charged for PRSAs. Accordingly, this approach proves much better value for money for all participants over the course of a standard retirement planning horizon.
With regard to the fee for the investment management services, these services have been procured through a competitive procurement process and will average at just under 0.04% of assets under management. These fees are considerably less than the rate of 1% of assets which is the norm for many personal retirement saving schemes.
I am therefore satisfied that the structure of fees and charges in MyFutureFund ensures that all participants get the maximum value for money.
I hope this clarifies matters for the Deputy.
