Minister for Social Protection Dara Calleary’s officials will next week officially start a search for investment managers to oversee assets in the auto-enrolment (AE) pension scheme, after months of delays.
A so-called request for tenders document “is being finalised with the assistance of the Chief State Solicitor’s Office and the Office of the Attorney General and is expected to be published next week”, a spokesman for the Department of Social Protection told The Irish Times.
The spokesman said the Government still plans to introduce the AE programme, which will capture 800,000 workers that are not part of a pension plan, at the end of September.
Mr Calleary’s predecessor, Heather Humphreys, said in early October that the department would begin the search for investment managers “shortly” as she committed to AE being in operation by the end of this September, following a series of missed deadlines.
Department officials had originally signalled in the autumn of 2023 that they would initiate the tender by the end of that year and that four successful bidders would be signed up in the second quarter of 2024.
The AE scheme will be named My Future Fund. The department has committed to the National Automatic Enrolment Retirement Savings Authority (Nearsa), which will oversee the administration of the scheme, being established by the end of March.
The department has previously said it aims to select four investment management companies to invest AE contributions from employees, employers and the State. The investment managers will provide three strategies: a higher-risk, medium-risk and lower-risk strategy. All participants will be placed in a default strategy if they do not choose a specific one.
Investment groups such as Amundi, Irish Life’s investment management arm and State Street Global Advisors are expected to be among bidders for the investment management contracts. However, there are concerns in the industry that this will lead to “generals” in all asset classes, rather than specialist managers in particular assets.
Auto-enrolment will apply to people between the ages of 23 and 60 who earn at least €20,000 a year and are not already part of a pension scheme through their job.
Employers and employees will both contribute 1.5 per cent of their gross earnings to it initially, with the State adding a further 0.5 per cent. The contributions of all parties will gradually increase, reaching 6 per cent and 2 per cent, respectively, by 2034.
The department signed up Indian group Tata Consultancy Services, which has a base in Letterkenny, Co Donegal, employing 1,400 people, last year to build and run the auto-enrolment system for the next 15 years at an estimated cost of €150 million.
