Dáil Éireann Debate, Tuesday - 26 May 2026
764. Deputy Aidan Farrelly asked the Minister for Social Protection the protections that are in place in respect of investments made by the three companies selected by the national automatic enrolment retirement savings authority to manage future funds; if the State guarantees are applicable to investments; and the degree to which he and or the authority can protect persons investments in the context of economic shocks and or downturns. [40022/26]
View answer765. Deputy Aidan Farrelly asked the Minister for Social Protection the costs to date in establishing My Future Funds; and the cost of engaging three companies to manage investments [40023/26]
View answerI propose to take Questions Nos. 764 and 765 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 MyFutureFund - commenced on the 1 January 2026. Over 800,000 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.
MyFutureFund 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 by my Department 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 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 €10 million p.a. over a 10 – 15-year period. NAERSA's annual staffing and corporate costs are estimated to be in the region of €10 million per annum.
Regarding the three investment managers, Amundi, Blackrock and Irish Life Investment Managers, the State has not borne any costs in relation to their management of investments. An investment management fee is charged to participants by the investment managers. This fee is less than 0.04% of assets under management (AUM). This is considerably lower than charges typically available in the market (typically 1.5% or higher) and consequently provides excellent value to the participants of MyFutureFund.
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. The projected cost of the State top-up for this year is €154 million.
MyFutureFund is part of the supplementary retirement system, all of the fund including not just the employee but also the employer and state contributions, is the property of participants. The addition of a State contribution as well as an employer contribution provide a very significant buffer to protect the participants’ own contribution from downside risk. In addition, participants not only have the right not to participate but (via opt-out and suspend opportunities) but to choose between investment options.
As is the case, not just in Ireland but generally, retirement savings schemes including PRSA and occupational pensions, which benefit from State contributions or tax reliefs not available for standard savings accounts, do not attract an additional State guarantee. The provision of such a guarantee was not proposed as part of the very detailed and comprehensive design and development process. To provide a state guarantee in the case of MyFutureFund would likely be seen, and challenged, as State-aid favouring the auto-enrolment system over other retirement savings vehicles already in the market.
When procuring investment managers, considerable care was taken to ensure that the investment managers selected demonstrated a significant track record of success in managing pension investments, that the investment plans they offer are properly regulated and that they are rated under the European Securities and Markets Authority (ESMA). In addition, MyFutureFund uses a pooling system whereby participants get the benefit of the average return, for their preferred investment option, from across the three investment managers – this significantly dilutes the risk of one investment manager underperforming. NAERSA will also continuously oversee the performance of the procured funds through its investment management committee and will ensure there are systems of quality assurance with regards to the procured funds.
On this basis, MyFutureFund participants can have confidence that their investments will be invested in a responsible manner.
