Auto Enrolment is a government-backed pension savings system that will automatically enroll eligible employees into a pension scheme called My Future Fund.
The program addresses Ireland’s pension coverage gap by ensuring workers who aren’t already in a pension scheme begin saving for retirement.
Three-Way Funding Model
Contributions will come from three sources:
• Employees
• Employers
• The State
Eligibility: Who Will Be Automatically Enrolled?
Age Requirements
Employees must be between 23 and 60 years old to qualify for automatic enrollment in the program.
Income Threshold
Employees must earn more than €20,000 per year across all employment to be automatically enrolled.
No Existing Coverage
Only employees who aren’t already participating in a qualifying workplace pension scheme will be automatically enrolled.
Employees who don’t meet these criteria may still be able to opt in voluntarily to benefit from employer contributions and State top-ups.
Contribution Structure and Timeline
Year 1 (2026)
Starting contributions:
•1.5% from employer
•1.5% from employee
•0.5% State top-up
Years 2-9
Gradual increases in contribution rates for all parties over time.
Year 10
Final contribution rates:
• 6% from employer
• 6% from employee
• 2% State top-up
All contributions are calculated based on earnings up to a ceiling of €80,000 per year.
Opt-Out Windows
Employees can choose to opt out during specific periods:
• Between months 7-8 after initial enrollment
• Following any future increase in contribution rates
Contribution Suspension
After 6 months of participation, employees can temporarily suspend contributions for up to 2 years.
Employer Obligations
Mandatory Participation
All employers must participate in Auto Enrolment unless they already offer a qualifying pension scheme that meets or exceeds AE standards.
Contribution Matching
Employers must match employee contributions according to the mandated schedule, starting at 1.5% and eventually reaching 6% of qualifying earnings.
Administrative Compliance
Employers will need to maintain records, facilitate enrollment, and ensure timely transfer of contributions to the My Future Fund.
Employers should begin preparing now by assessing if their current pension arrangements meet Auto Enrolment standards or considering alternatives like Master Trusts or Group PRSAs.
Auto Enrolment vs. Traditional Workplace Pensions
Auto Enrolment – Fixed contributions only, State top-up instead of tax relief, State Pension age (66), 3 risk-based options + default, Financial guidance not included
Traditional Scheme – Flexible contributions including AVCs, Full tax relief at 20% or 40%, Accessible from age 50, Broad range of funds and strategies, Typically includes Financial Advisor