Irish Life Investment Managers (ILIM), Amundi and BlackRock have been selected to manage assets in the State’s incoming automatic-enrolment pension scheme.
It is expected these companies will complete contract negotiations this summer, well in advance of the commencement of the auto-enrolment regime, known as My Future Fund, in January, the Department of Social Protection said in a statement on Tuesday.
ILIM had €131 billion of assets under management (AUM) at the end of last year. Amundi is Europe’s largest asset manager, with €2.24 trillion of AUM in December, while BlackRock is the world’s largest, with $11.6 trillion.
Amundi has a significant presence in Ireland, with about 380 employees, stemming from its 2017 purchase of Dublin-based Pioneer Investments in 2017. BlackRock opened an office in Dublin, home to one of the world’s largest funds hubs, in 2011, and has subsequently grown its headcount to more than 140 employees.
“My Future Fund is a transformative initiative that will revolutionise how people save for their retirement,” said Minister for Social Protection Dara Calleary. “This is a landmark policy and these investment management companies, who have been selected after a competitive procurement process, will play a huge role in ensuring that My Future Fund is a success and represents good value for money for all future participants.”
The Department of Social Protection has in recent weeks launched a search for a chief executive of the National Automatic Enrolment Retirement Savings Authority (Naersa), which will oversee the administration of the AE scheme. AE will capture about 800,000 workers in the State that are not currently part of a pension plan.
The appointee to the €215,000-a-year role will be expected to “bring vision, strategic leadership and effective management across all the functions of the Naersa in order to ensure that it discharges its functions efficiently and effectively to the benefit of its estimated 800,000 participants and Irish society more generally,” according to an information booklet for candidates. May 29th has been set as the closing date for applications.
The AE scheme is expected it will hold more than €20 billion of assets on behalf of beneficiaries within 10 years, rising potentially to more than €300 billion over 30-40 years, according to the booklet.
First proposed by then government Fianna Fáil minister Séamus Brennan in 2006, AE has been through years of delays and false dawns. However, enabling legislation was finally enacted last July and Indian group Tata Consultancy Services was signed up in October to build and run the AE system. The department is in the middle of procuring three investment managers to handle the assets in the fund.
Under the terms of the Irish scheme, which applies to workers aged between 23 and 60 who earn at least €20,000 per annum across one or more jobs, employers and employees will each initially contribute 1.5 per cent of gross earnings to their pension pot, with the government adding a further 0.5 per cent. The contributions are due to increase in stages over 10 years, reaching 6 per cent, 6 per cent and 2 per cent, respectively.
