Workers deserve straight answers on pension promise

Briefing documents for Minister concede there is little chance of meeting Government’s self-imposed deadline

For reasons known only to themselves, the Government seems hell-bent on undermining its own credibility on the proposed new mandatory workplace pension schemes.

Briefing papers from Department of Finance officials for the incoming Minister, Michael McGrath, note progress in getting legislation together to implement auto-enrolment of all people aged 23-60 earning more than €20,000 a year into a workplace pension. However, it adds, pointedly: “The envisaged commencement of AE [auto-enrolment] is 2024, which at this point seems somewhat ambitious given all that needs to be done.”

“Somewhat ambitious” sounds like civil servant-speak for “wildly unrealistic”.

Just a couple of months earlier the Minister charged with getting auto-enrolment up and running, Minister for Social Protection Heather Humphreys, confidently asserted it would be in place by that latest deadline. “After decades of talking about auto-enrolment in this country, I am pleased to say the AE train is now very firmly on the tracks and leaving the station ahead of its introduction in early 2024,” she said in October.


It sounded wildly optimistic to industry observers then and nothing that has happened since has given grounds for greater optimism.

Humphreys’ comments in October came as she got Cabinet approval for the draft heads of the necessary legislation. The next step was for the draft legislation to be examined by the Oireachtas committee for social protection. It was almost two months before that began and the committee is still talking to various interested parties before drawing up a report that will inform the final wording of the Bill.

The legislation then has to pass through the Oireachtas, be signed into law by the President and commenced by the Minister. It would be an achievement to get all that done over the next 11 months, though governments have shown previously that it is possible with political will.

However, this draft bill has already drawn criticism over several features, most critically the design of the central processing authority that will run auto-enrolment.

At a recent meeting of the Oireachtas committee, Irish Life managing director of corporate business Oisín O’Shaughnessy noted that even in New Zealand, where the running of auto-enrolment is largely in private sector hands, it took 18 months to get the system up and running. In the UK, where the State established a public sector provider of last resort alongside the private sector, the process took four years.

Ireland is looking to put the State in full control of contribution collection, asset allocation, and pooling and distribution of pension savings. On the basis of the UK experience, there was never a chance of hitting the early 2024 deadline. Missing that date brings the politically sensitive project perilously close to the start of the next general election campaign ... and further delay.