The legislation for Ireland’s auto-enrolment (AE) pension system is at an “advanced stage” and is “expected to be published in the coming weeks”, Ireland’s Department of Social Protection (DSP) has stated.
Previously it was thought that the Bill, which will be known as the Automatic Enrolment Retirement Savings System Bill 2022, would be published before the end of the year. With the Dáil recess beginning at the end of next week, it is now expected that it will be 2024 before the Irish government introduces the legislation.
“The drafting of the Bill is at an advanced stage. It is expected to be published in the coming weeks and to begin its passage through the Houses of the Oireachtas immediately thereafter,” a DSP spokesperson told European Pensions.
“This is a highly complex project with an ambitious timeline and in that context, the commencement of the system is on track for the second half of 2024,” the spokesperson continued.
"Provision has been made in the social welfare vote for the continued development and implementation of the AE system. Separately, the provision of the state contribution or ‘top-up’ to AE participants’ savings pots is being dealt with as part of the establishment of the Central Processing Authority structure, and its vote, once the legislation is enacted.”
The rollout of AE in Ireland has been blighted by delays and many in the industry believe it will be a challenge to launch the system in the second half of 2024. Speaking to European Pensions, Irish Association of Pension Funds (IAPF) CEO, Jerry Moriarty, said: “Auto-enrolment is still trundling along…. Every time a deadline date is set it seems to get missed.”
Initially, legislation was expected before the summer recess, but 2024 is now a more realistic expectation. The administrator was also expected to be appointed in September but that is now expected in early 2024. In addition, Moriarty believes the investment manager tender will most likely commence sometime next year.
“While they are still saying they will have everything in place, it’ll be set up and ready to run in 2024, it is really difficult to see how that is going to happen. If the administrator isn’t appointed until early 2024, they’ve then got to go and build an administration system for over 800,000 people,” he explained.
“That’s going to be different to existing systems because the scheme is going to operate differently, so it’s kind of difficult to see. I think 2024 was always going to be challenging, now it’s even more challenging.”
He also highlighted that the recent Irish Budget did not set out any budget for the government’s contributions to auto-enrolment pension schemes for 2024: “Ireland had its Budget recently and there is nothing in the Budget for government contributions next year, which makes you think the government has decided they are not going to be contributing next year.”
In response, the DSP stated: “Provision has been made in the social welfare vote for the continued development and implementation of the AE system. Separately, the provision of the state contribution or ‘top-up’ to AE participants’ savings pots is being dealt with as part of the establishment of the Central Processing Authority structure, and its vote, once the legislation is enacted.”
Moriarty believes the delays to the rollout of AE are because it is “a lot more complex than what the government thought it was going to be.”
Furthermore, whilst he can understand the rationale behind having one provider and building a separate system for it, he said it is inevitable that this approach will be slower than using existing infrastructure.
“You have to go through public procurement tender processes, they in themselves can be very unwieldly and slow. There’s no way around that, it just does make it slower. I think they underestimated how difficult and how complex DC schemes are,” Moriarty said.
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