Ireland – The Introduction of Auto-Enrolment

Auto-enrolment is a significant development in the Irish pension landscape. Is your business prepared? Below is an outline of what you need to know and understand, along with the key considerations and next steps. 

Background

Auto-enrolment is a new retirement savings system for employees that was introduced on 1 January 2026. Employees who do not have a pension scheme, earn more than €20,000 per annum and are aged between 23 and 60 will be automatically enrolled into the new system. In addition, both the employer and the State will also be required to contribute.

How does auto-enrolment work?

In an auto-enrolment system, employers are required to automatically enrol eligible employees into a pension scheme – “My Future Fund.”   My Future Fund is a new Irish state-sponsored system and is the single, centralised auto-enrolment retirement savings scheme for Ireland. The employee's contribution is deducted directly from their salary before taxes.

Key aspects

Eligibility
Employees are automatically enrolled if they are between the ages of 23 - 60, have no existing occupational pension scheme with their employer and are earning above a minimum threshold (€20,000 per annum). Employees who are under 23 or over 60 years of age, or who earn less than €20,000 a year, can opt in if they wish. All auto-enrolment conditions – such as contributions from the employer, the employee and the State - apply for employees who opt in.

Automatic enrolment
Once eligible, the employee is enrolled without needing to take any action.

Contributions
The contribution rates are being phased in over the first 10 years with employee contributions starting at 1.5% of gross pay and increasing as follows: 

Employers will match contributions
In addition, instead of tax relief on employee contributions, the State will provide a top-up contribution at a rate of €1 for every €3 paid. As the employee and employer contributions are matched equally and then topped up by the State, the total amount of contributions will amount to 14% of an employee’s gross earnings from year 10 onwards.

Minimum contribution standards have been developed in consultation with the Pensions Authority. The standards ensure that benefits from existing schemes are at least as beneficial as My Future Fund under the introductory contribution rates. For defined contribution schemes, this means that the minimum total contribution rates must be 3.5% of an employee’s gross pay, with a minimum of 1.5% from the employer.

Contributions will be calculated on the employee’s gross earnings, so anything included in the gross pay field of a payroll file will be assessable. Contributions will not, however, be levied on any gross pay over currently €80,000 per annum.

Opt-out rights
Employees have the right to opt out if they choose. If they opt out within a certain period – six months minimum, their contributions are refunded, and they are removed from the scheme. However, if they stay enrolled, contributions continue until they retire or leave the job.

What does auto-enrolment mean for employers? Considerations and next steps

• Identify any staff who could be required to auto-enrol under the auto-enrolment scheme. Is this the preferred route, or would you rather have them join your existing workplace pension plan?
• Review payroll and HR systems/processes. Employers may need to modify their existing payroll systems to accommodate the changes arising under auto-enrolment.
• Plan and budget for auto-enrolment costs per employee. Allocating sufficient funds for employer pension contributions is a significant financial commitment that requires careful budgeting and planning.
• Re-evaluate the existing pension plan structure. Is there a requirement to adjust any waiting periods? There will be no waiting period in the auto-enrolment scheme, so employees will be enrolled as soon as they are deemed eligible. This means that if your occupational scheme has a waiting period, employees could be automatically enrolled before they can join your scheme. If this happens, and the employee later wants to join the occupational scheme, they will be able to do so.
• Understand the regulations. Ensuring adherence to all pension regulations is essential to avoid legal complications and repercussions. Employer participation is mandatory, and failure to meet auto-enrolment obligations can result in penalties and potential prosecution.
• Understand how the new regulations may impact employment contracts such as including provisions for auto enrolment at least for new hires.
• Prepare communications for your employees. Providing clear and ongoing communication to employees about their pension contributions and any changes to their benefits is a key responsibility for employers

"Ireland's auto-enrolment is a significant shift, and many affected employers are still getting to grips with what it means for them. The good news is that with the right advice, it's entirely manageable".

 Graham Yearsley, Principal Consultant, Quantum Advisory

Is your organisation ready for Ireland's auto-enrolment?

Whether you're based in Ireland or have employees or operations there, now is the time to act. Ireland's auto-enrolment obligations are already in motion - with phased contribution rates, payroll implications, compliance requirements and employee communications all requiring decisions and navigation.  

Quantum Advisory is here to help. Through our partners, we can support you in understanding your obligations, reviewing your existing pension arrangements, and making confident, informed decisions about the right approach for your organisation.