Start date announced for auto enrolment- 30 September 2025

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Dr Strangelove

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Start date of 30 September 2025 announced:


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Or, they could kick it down the road until they see the outcome of this revist to the PEPP

Possible demand-side fixes should aim at encouraging pension participation in general. Leveraging all three pillars of pensions (state, occupational and personal) is necessary to secure citizens’ financial freedom in retirement and changing the status quo calls for bold proposals:

  • Introduce auto-enrolment for a personal pension scheme like the PEPP at the EU level.

Gerard

www.prsa.ie
 
Dr Strangelove said:
Seems odd not to start it on a calendar year basis.
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A psychological deadline to get things moving so that they can announce a further delay during 2025 and it would only be for three months? If they pushed the date back to the start of 2026 now, a lot would happen in the weeks leading up to that deadline.
 

So there you have it My Future Fund will be up and running from next September according to today's budget. No talk of any tax relief changes so we will have the situation where My Future Fund will have half the state subsidy for 40% taxpayers compared to the current system.
 
There's no way they'll be able to launch the scheme by September. Have they done anything on investment strategies for the three risk-rated funds? Even to select managers? Have DSP and PER (or should I say PENDPDR?) agreed on the management charge: will it be on AUM only or will there also be a contribution-based charge? The last I heard (over two years ago now, I think) was that the charge would be 0.5% a year on AUM, but that won't go anywhere near covering the long-term cost of administering the scheme. NEST charges more than 0.5% (in the early years, through a combination of a contribution-based charge and an AUM charge). It also has economies of scale that "My Future Fund" can never even aspire to, yet NEST had a cumulative deficit (admin costs in excess of charges on member accounts) of more than €1 billion at March 2023 - and still rising, as I recall. That was after more than a decade in business. The omens for the Irish fund are terrifying.
I can't understand how a scheme so big (combined contributions of €4.5 Billion a year - employers, employees and state - in current money terms after the initial 10-year run-in period) has got this far without being subjected to detailed scrutiny by the ESRI or similar. Such a study must be undertaken before the government gets sucked into a mess of children's hospital proportions.
 
PEPP has been a dismal failure.

Only one company in the entire EU vcurrently offering PEPP services, Finax, and only to customers in Poland, Croatia, Slovakia or Czechia.

I thought once a PEPP was offered by any company in the EU then any EU citizen could apply for that product but not the case.
 


If NEST in the UK make a loss with a 0.5% AMC on all assets, even though I presume NEST has scale, then how are Vanguard and others charging 0.20% on large ETFs?
 
At EU level - We're having issues getting providers to come on board at 1% AMC for a PEPP. We might be able to convince them if it's an AE type product.

At Irish level - We're running with 0.50% AMC for AE

At corporate pension level in Ireland the client will get 0.50% and under (say 0.20%) if there are large economies of scale on numbers but the employer will have to pay circa €200 per member per annum to service/administer that and, lets be honest, there won't be a whole lot of advice with that. Someone else pays.

The likes are Vanguard are regulated here as a service provider to a fund. That's nothing like a product provider. Maybe they don't like (or have some other mysterious reason for not being in IRL market) the regulatory/compliance obligations and costs here.

A recently approved alternative investment platform said that "We could have looked at getting authorised elsewhere in Europe, which we were told would have been easier and quicker but we wanted the CBI’s rubber stamp,” “It’s well known that they’re the gold star when it comes to regulation in Europe, and we think it will help show just how dedicated we are to building a safe and trustworthy business.”

But, I supppose some people would still buy their (advertised) 0.20% AMC pension with their 1L of oil at the petrol station if that unregulated market still existed.
 
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Protocol said:
If NEST in the UK make a loss with a 0.5% AMC on all assets, even though I presume NEST has scale, then how are Vanguard and others charging 0.20% on large ETFs?
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Others with experience of administering pension schemes are more qualified to answer your question, since I have no administration experience, but I'll have a go anyway.
They're as different as chalk and cheese. Large lump sum contributions are common, possibly the norm, with Vanguard. All NEST contributions are small - tiny in pension terms. The methods of remittance are also very different: payroll deduction is very difficult to administer, I would think, especially when people change jobs and there are contributions from employers and employees. Lapse rates with NEST are very high - around 15% a year in the early years, as I recall. The scheme therefore has millions (literally, I would say) of tiny accounts, many with little more than £100 in them, some with less. I recall calculating that the average fund amount for NEST (with contributors there for over 6 years on average) was just £12,000 or thereabouts. Lapses themselves are also a major administrative hassle. They are unknown with Vanguard. I could go on and on. Anyway, the NEST experience is what the Irish scheme should be looking to. Thinking about it, the Irish scheme will probably be more expensive again, because of certain design features.
On a point of detail, I should clarify that the NEST charging model is not 0.5% of AUM a year. It's a combination of a charge on contributions and a (lower than 0.5%) charge on AUM. Up to now, NEST charges have exceeded 0.5% of AUM on a cumulative basis.
 
Letter to Irish Times by Colm. Add My Future Fund to the Children's Hospital, the Electronic voting machines and of course the Leinster House bicycle sheds.

 
I see (didn't see) there is no reference to AE in the Programme for Deals. They think it is done and dusted.
I have been corrected that it is mentioned:
Program for Government said:
Introduce the Auto Enrolment My Future Fund in September 2025 to provide workers with greater comfort and security regarding their retirement savings.
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