Politics

Varadkar warns against temptation to delay auto enrolment pension Bill because of elections

Legislation is set to bring 800,000 workers aged between 23 and 60 and earning above €20,000 into a retirement scheme for first time

Heather Humphreys: she said she accepted Leo Varadkar’s advice about not delaying. 'Time is not on our side.' Photograph: Stephen Collins/Collins Photos

Marie O'Halloran
Wed Apr 17 2024 - 20:58

Former taoiseach Leo Varadkar has made his first speech in the Dáil since standing down from office. He made his contribution on the auto enrolment of workers into a pension plan.

Mr Varadkar said that if he had any advice for the Minister on the legislation it would be to “push back against any attempts to delay this” despite the temptation heading into elections that it could be “awkward”.

He was speaking during the ongoing debate on the Automatic Enrolment Retirement Savings System Bill, introduced by Minister for Social Protection Heather Humphreys. The legislation is set to bring some 800,000 workers aged between 23 and 60 and earning above €20,000 into a retirement scheme for the first time.

Warning the Minister not to allow the Bill to be delayed, he said he understood “the temptation heading into elections that this could be awkward. And people might see money coming out of their pockets and ‘let’s put it off’.

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“I understand the pressures that SMEs and small customers are under when it comes to rising costs. But there are ways around this.”

Ms Humphreys said she accepted Mr Varadkar’s advice about not delaying. “Time is not on our side,” she said adding that “the best time to start saving for a pension is always now”.

Mr Varadkar said the legislation was not perfect but it was good as Ireland remained the only OECD country not to have a pension scheme like this in place.

He suggested that on the impact for businesses, the Low Pay Commission could take this into account “in the recommendation for next year on the minimum wage. I think they should because this is pay, deferred pay.”

The legislation will take effect next year, and Mr Varadkar expressed concerns about delaying the Bill’s implementation until 2026 or 2027.

The funds will be managed through the private pension sector and Independent TD Denis Naughten said he favoured the legislation being managed by the National Treasury Management Agency (NTMA).

But Mr Varadkar said the other side of there not being a government guarantee means “it is your private property, that could never be raided by the government in the event of a crisis”, and it gave people a choice on their own investments.

He added that it would benefit people who work in small and medium enterprises, people self-employed, those working for NGOs in the voluntary sector, contractors like security guards and cleaners, and home helps.

Mr Naughten had pointed out that the legislation would be unfair to women but Mr Varadkar said most of the lower paid “were women or part-time, and for the first time they’re going from having no pension to having something” in addition to the State pension.

Ms Humphreys stressed that the State pension “is and will remain the bedrock on which the Irish pension system is founded”.

Marie O'Halloran

Marie O'Halloran

Marie O'Halloran is Parliamentary Correspondent of The Irish Times

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