Auto-Enrolment (AE) – “My Future Fund”
Launching 1 January 2026, Ireland’s new Auto-Enrolment pension mandate delivers a streamlined, co-funded retirement solution for employees and employers alike.
Key Features at a Glance
- Automatically captures employees aged 23–60 earning > €20,000 p.a., not already in a qualifying pension.
- Defined-contribution structure: employee, employer and State all pay in.
- Initial contribution 1.5 % of gross earnings, escalating to 6 % by Year 10.
- Employer match on a one-for-one basis (capped at €80,000 salary).
- State top-up €1 per €3 employee contribution (up to 2 % of pay once fully phased-in).
- Invested via ILIM, Amundi and BlackRock with a default lifecycle glide-path; low/medium/high-risk self-select options available.
Phased Contribution Schedule
| Years | Employee | Employer | State | Total |
|---|---|---|---|---|
| 1 – 3 | 1.5 % | 1.5 % | 0.5 % | 3.5 % |
| 4 – 6 | 3.0 % | 3.0 % | 1.0 % | 7.0 % |
| 7 – 9 | 4.5 % | 4.5 % | 1.5 % | 10.5 % |
| 10 + | 6.0 % | 6.0 % | 2.0 % | 14.0 % |
Investment Strategy
All members start in the default lifecycle fund, gradually de-risking as they approach the State Pension Age (currently 66). Self-select switches into low-, medium- or high-risk portfolios are permitted at any stage.
Opt-Out & Suspension Windows
- Opt-out: months 7–8 after initial enrolment or any future rate step-up (employee contributions refunded).
- Suspend: permitted any time after month 6 for 1- to 2-year breaks (no refunds; automatic re-enrolment after two years).
Retirement Access
Benefits crystallise at age 66. Members may take the revenue-permitted lump sum, purchase an annuity or transfer to an Approved Retirement Fund (ARF).
AE vs PRSA – Executive Snapshot
| Feature | PRSA | Auto-Enrolment |
|---|---|---|
| Tax relief on employee contributions | Yes (20 % / 40 %) | No – State top-up instead |
| Contribution flexibility | High – choose any amount within limits | Fixed % only |
| Employer obligation | Voluntary | Mandatory match |
| Investment universe | Wide, multi-manager | CPA-curated default & 3 risk strategies |
| Fund access age | 60 – 75 | 66 |