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The auto-enrolment pension scheme in Ireland is set to begin on 1 January 2026. This mandatory system automatically enrols eligible employees into a retirement savings plan, creating a triple-benefit structure where employees, employers, and the State all contribute to building the employee's pension pot.
About the new auto-enrolment scheme
All employees aged between 23 and 60 years, whose annual earning is EUR 20,000 or more from all employments and who are not already included in workplace pension arrangements, will be automatically enrolled.
It will be run and managed by National Automatic Enrolment Retirement Savings Authority (NAERSA)
Employee and employer's contribution
Employer and employee will make equal contribution, and government will also make additional contribution. In the first year, employer and employee will contribute 1.5% of total gross salary. The total contributions will gradually increase to 14% in the span of 10 years.
Benefits to employees
- It will ensure increased savings, ease, and convenience along with reduced risk of inaction for employees.
- The employee can also continue to contribute towards personal pension independently, outside of the payroll system.
- An employee can opt-out from auto-enrolment with no penalty.
- If the employee opts-out or stops working he remains enrolled in the scheme, and he can start making contributions again if he starts working. The savings will be continued to be invested, and it can be withdrawn once the employee reaches the retirement age of 66 years.
- If the employee changes job the employee's savings will continue to be held in the same scheme and the new employer will also start contributing to the same fund.
- Apprentice will also be enrolled in the new scheme if he meets the eligibility criteria.
- If the company director is paying Pay Related Social Insurance (PRSI) as an employee and he meets eligibility criteria, then he will be auto enrolled in the scheme.
- Any existing pension scheme will run parallel to auto-enrolment scheme. Employees who are contributing to the existing scheme will not be enrolled in the new scheme.
Benefits to employers
- Employers need not pay to set up a company pension scheme.
- Employers need not administer a company pension scheme.
- Employer contributions will be deductible for corporation tax purposes.
Steps of employer registration with MyFutureFund portal
- Visit www.myfuturefund.ie - The official portal managed by NAERSA
- Use Revenue Online Service (ROS) login to authenticate.
- Complete employer profile - Enter company name, employer tax reference, PPSN details, payroll frequency, and bank details.
- Set Up a Payment Method - Choose between Direct Debit or Manual Payment.
- Prepare Payroll System - Ensure payroll software supports AEPN and integration is tested.
- Communicate With employees - Inform staff about eligibility, contribution rates, and opt-out rules.
Our Comments
The auto-enrolment scheme is welcomed by employees but may create a significant challenge for employers from a compliance and operational perspective which will result in additional business costs. The employers should conduct a business and workforce impact analysis, assessing their workforce by factors such as age, salary, and current retirement plans. They must also consider the costs related to contributions, scheme administration and any other relevant employee aspects. Furthermore, employers should engage with key stakeholders such as payroll providers and existing pension plan providers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
