Dáil Éireann Debate, Tuesday - 2 December 2025
383. Deputy Richard Boyd Barrett asked the Minister for Social Protection when workers will be informed of the charges under which the ‘My Future Fund’; and if workers will not be informed till after the scheme commences on 1 January 2026. [67863/25]
Amharc ar fhreagra384. Deputy Richard Boyd Barrett asked the Minister for Social Protection if it is proposed to charge a fixed fee to administer members’ auto enrolment accounts, which may be in breach of Section 104 of the Pensions Act; if his Department think that Section 104 does not apply and that it can therefore discriminate against low-paid members. [67864/25]
Amharc ar fhreagra385. Deputy Richard Boyd Barrett asked the Minister for Social Protection the way in which his Department plans to ascertain members' investment preferences before contributions are received to the auto-enrolment scheme on 1 January 2026, as required under Section 70 of the Act. [67865/25]
Amharc ar fhreagraI propose to take Questions Nos. 383, 384 and 385 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 - will commence from 1 January 2026. The implementation of My Future Fund will pave the way for around 750,000 workers to be brought into a retirement savings scheme for the first time and I look forward to its implementation.
The administration fees associated with My Future Fund are under active consideration and will be finalised shortly through Regulation following consultation with the Chief Executive of the National Automatic Enrolment Retirement Savings Authority and the Minister for Public Expenditure, Infrastructure, Public Services Reform and Digitalisation, after which more details will be provided to the public. This is expected shortly, in advance of commencement on 1 January 2026.
Section 104 of the Pensions Act (1990) concerns charges relating to Personal Retirement Savings Accounts (PRSA). These provisions do not apply to My Future Fund, which is statutorily established on the basis of the Automatic Enrolment Retirement Savings System Act (2024). It is this Act and the regulations issued thereunder that set out the basis for the fees charged.
As previously announced 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.
In addition to the administration fees, there will be fees for the investment management services. These services have been procured through a competitive procurement process. That tendering process required fees to be less than 0.1% of assets under management. In this regard, I can confirm that the prices attached to the bids were significantly below the maximum ceiling and represent excellent value for participants.
With regard to ascertaining the investment preferences of participants, Part 4 of the AE Act provides for a default strategy whereby individual participants are allocated to a risk level relative to their age. This default strategy follows a life-cycle approach whereby younger participants are allocated to higher risk growth investment funds while participants closer to retirement will be allocated to lower risk investment funds designed to preserve the value of funds in the years before a participant retires. Should a participant wish to exercise a choice in the level of risk, from lower risk to medium risk to higher risk, then they will be able to do so through their My Future Fund account. This design aligns with a key principle of the AE system here in Ireland, which is to facilitate choice but not to mandate it.
I hope this clarifies these matters for the Deputy.
