Business

Auto-enrolment pension systems bids narrow as Bill nears publication

Plan by Minister for Social Protection Heather Humphreys to launch landmark project by the end of the year continues to draw a lot of scepticism

Minister for Social Protection Heather Humphreys insisted last week the Auto-enrolment pensions scheme will be launched later this year. Photograph: Stephen Collins/Collins Photos

Joe Brennan
Wed Mar 13 2024 - 05:28

The Department of Social Protection said that it is on track to publish a draft legislation before Easter on its landmark auto-enrolment (AE) pension scheme, as it works through a shortlist of parties vying for a €150 million contract to develop and run the system over 10 years.

Sources said Indian IT company Tata Consultancy Services (TCS), which set up and runs a UK auto-enrolment system established over a decade ago, and US professional services firm Accenture are among shortlisted parties vying for the key contract.

However, FNZ Group, a London-based investment platforms specialist that had pitched for the business and was widely expected to make the shortlist, is no longer involved in the process, they said.

UK pensions and retirement technology company Smart Pension, which trades under the Smart brand outside of its home market, has also been linked by industry sources to a bid.

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Spokeswomen for TCS, Accenture and Smart and a spokesman for FNZ declined to comment.

“We are unable to comment on a live procurement competition; however, we can confirm that the department is on track for the AE Bill to be published before Easter,” a spokeswoman for the Department of Social Protection said.

Minister for Social Protection Heather Humphreys insisted last week in an interview with RTÉ Radio 1 the landmark (AE) pensions scheme will be launched later this year, even though there is widespread scepticism among pension industry and business leaders about this being met.

The department issued a so-called request for tender in early February to the shortlist of firms bidding to build and run the AE system. It had originally been targeting a launch of the formal tender process in November. The AE Bill was originally aimed for publication before the Dáil recess last summer and was subsequently revised to a time before the end of 2023. The latest deadline was set early last month.

The target of having auto-enrolment, which was first proposed in 2006, up and running within 12 months has long been viewed sceptically by pensions industry participants and businesses. It is expected that about 750,000 workers without occupational or private pension plans will be captured by the plan, which has been the subject of years of starts and stops.

The department started engaging last summer with companies looking to bid for the contract through a pre-qualification stage. The successful party will provide and operate the system on behalf of a planned new State organisation, called the Central Processing Authority, that will oversee auto-enrolment.

The department must also find investment firms to manage the underlying assets of the auto-enrolment pot before a green button can be pressed on the scheme.

Department officials briefed employers two weeks ago on aspects of the incoming system.

“Business remains frustrated, however, because it is not getting clarity on timelines,” said Fergal O’Brien, executive director for lobbying and influence at Ibec, the business representative body.

“This is going to bring financial costs from a budgeting perspective. There will also be administrative requirements. But we still don’t have a start date.”

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

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