This month we are updating on the forthcoming Introduction of Auto-enrolment in Ireland next year. Whilst Auto-enrolment is already in place in the UK, this will be the first scheme of its kind in Ireland. The below article refers specifically to the soon to be introduced Irish Scheme, unless specified otherwise, for example when drawing comparisons with the current UK scheme.
Below we look at some of the key questions around its introduction and consider what employers might need to know.
The introduction of the Auto-Enrolment Retirement Savings Scheme, called My Future Fund, will start from 1st January 2026. The scheme will be applicable to employees and employers in Ireland.
Auto-enrolment is a new retirement savings scheme for employees who do not already have a workplace pension scheme or an additional pension arrangement.
It will ensure that employees are looked after in retirement without a need for employers to set up an occupational pension scheme.
Under the scheme, the employee, employer, and Government all pay a certain amount into the employee’s pension fund.
A new public body, the National Automatic Enrolment Retirement Savings Authority (NAERSA), will be set up to administer the Auto-enrolment scheme. The scheme will be supervised by the Pensions Authority.
The rules for auto-enrolment are set out in the Automatic Enrolment Retirement Savings System Act 2024.
The new pension savings scheme is for certain employees who are not paying into a pension. They will be automatically included / enrolled in the scheme but can opt out after 6 months.
Employees will be automatically enrolled in the new pension scheme if they are:
If employees previously contributed to a pension but now do not, and they meet the other conditions, they will be automatically enrolled.
If employees earn less than €20,000 per year, or are not aged between 23 and 60, they can choose to join the pension scheme if they are not already part of a pension plan.
The contribution rates for auto-enrolment will be phased in over the first 10 years of the operation of the scheme:
The amount an employee pays will be a set rate of their annual salary. The employer will match the employee’s contributions, and the Government will contribute an additional amount. Neither Employee or employer can pay more or less than the set rate.
Employee and employer will pay 1.5% of employee’s annual salary in the first year. This will increase to 6% by year 10.
For example, at the beginning of the scheme, for every €3 that employees contribute to their pension fund, their employer will put in €3, and the Government will also put in €1. This means that for every €3 employees contribute, €7 will be added to their account.
The table below sets out the rates the employee, employer, and Government will pay:
| Year of the auto-enrolment scheme | Employee Contribution Rate | Employer pays | Government pays |
| 1 to 3 | 1.5% | 1.5% | 0.5% |
| 4 to 6 | 3% | 3% | 1% |
| 7 to 9 | 4.5% | 4.5% | 1.5% |
| 10 and after | 6% | 6% | 2% |
Both an employer’s and the Government’s contributions are capped at €80,000 gross annual salary.
This means for the first 3 years, the maximum amount an employer can contribute is €1,200 a year. This is because 1.5% of €80,000 is €1,200. The maximum amount the Government can contribute is €400 a year, which is 0.5% of €80,000.
If employees earn over €80,000, they can still contribute but their employer and the Government won’t match their contributions on any income over €80,000.
Once an employee has been identified as eligible for auto-enrolment, NAERSA will send employers an Automatic Enrolment Payroll Notification (AEPN) through payroll software.
This will inform employers of the contribution amounts they and the employee need to pay as a percentage of gross earnings.
Employers will apply the AEPN and the contributions will be visible on the employee’s payslip.
Employers have several options to pay the contribution amounts to NAERSA. The easiest way will be a variable direct debit, which can be set up through the auto-enrolment employer portal.
Contributions must be paid at the same time as the employee is paid, and contribution information must be provided to NAERSA.
For employers who do not use payroll software, they will be facilitated on the employer portal.
The benefits of auto-enrolment for employers include:
As auto-enrolment is a new employment right, employers have a responsibility to ensure that all eligible employees have access to the scheme.
The legislation sets out compliance and enforcement provisions to ensure that employers meet their auto-enrolment obligations.
Employers who prevent their employees from joining the scheme, or who force their employees to opt out or suspend contributions, may be prosecuted and will be subject to fines and penalties. Withheld or underpaid contributions will also attract interest payments.
Employers will also be obliged to inform their employees when they are first enrolled.
NAERSA will also publish a list of employers who have been convicted of non-compliance.
The Workplace Relations Commission will be responsible for dealing with cases where employees are hindered from joining auto-enrolment and/or are penalised for doing so.
Employers should be aware that: