Preparing for Auto‑Enrolment Pensions in Ireland, What Employers and Employees Should Know

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A major change is coming to Ireland’s retirement savings landscape: as of 1 January 2026, the new auto‑enrolment pension system, My Future Fund, will begin.

For many, this will mark the first time they are automatically saving for retirement via their workplace. For employers and staff alike, being ready now makes the transition smoother and ensures everyone maximises the benefits.

Here’s what you need to know, and how to prepare.

What Is Auto‑Enrolment (and Who Is It For)?

Auto‑enrolment is a State-backed pension‑saving system for employees who are not already in a workplace pension.

Key eligibility rules:

Employees aged 23 to 60.
Earning more than €20,000 per year across all employment.
Not already contributing to a company pension scheme (e.g. occupational pension, PRSA, similar qualifying scheme).

If you meet those conditions, you will be automatically enrolled, unless your employer already provides a qualifying pension scheme.

For those outside those criteria (e.g. under 23, over 60, earning less), there will be the option to opt in voluntarily.

How the Contributions Work: Employee, Employer & State

The scheme is designed to be a three‑way partnership:

In the first phase (Years 1–3), both the employee and employer contribute 1.5% of gross earnings, plus a 0.5% State top-up.
Over time, contributions gradually rise; by Year 10 (2034) both employee and employer contributions will reach 6%, with a corresponding increase in the State top-up.

The contributions apply on gross earnings (capped at a certain amount, e.g. €80,000).

Because the employer matches your contribution, and the State adds extra, most participants will see a significant boost in retirement savings, a far stronger result than if saving alone.

What Employers Must Do to Get Ready

If you run a business in Ireland, here’s the to‑do list ahead of 1 January 2026:

• Register With the New Authority (National Automatic Enrolment Retirement Savings Authority, NAERSA)

Employers must register with NAERSA via the employer portal (linked to Revenue Online Services).

• Audit Workforce Eligibility

Check which staff fall under the scheme (age 23–60, earnings over €20,000, not already in a pension).

• Decide Whether to Use My Future Fund or Maintain/Offer a Qualifying Pension Scheme

If you already offer a qualifying occupational pension or PRSA and have employees enrolled, they may be exempt from auto‑enrolment.
If not, you must use My Future Fund or another qualifying scheme.

• Update Payroll Systems

Payroll software or payroll processes must be updated to deduct employee contributions, add employer contributions, and report them to NAERSA every pay period.

• Budget for Employer Contributions

Employers will need to plan for the additional cost, starting at 1.5% of eligible payroll and rising over time.

• Communicate With Employees Clearly and Promptly

Under the new system, employees must be informed when they are being enrolled. Employers must provide clear info on contributions, rights to opt out (see below), and any existing pension alternatives.

• Stay Compliant, Penalties for Non‑Compliance

Auto‑enrolment obligations are statutory. Employers who block or penalise eligible staff for joining (or delay contributions) risk legal enforcement via regulators.

In short: even for small employers, the administrative burden isn’t huge, but preparation is essential. Once the systems are in place, the process stabilises.

What Auto‑Enrolment Means for Employees

For many workers, particularly those currently without a pension, auto‑enrolment represents a big win. Here’s why:

• Guaranteed Retirement Savings

If you meet the age and income thresholds and aren’t already in a pension scheme, you will be automatically enrolled. That means retirement savings even if you never got around to opening a pension yourself.

• Employer and State Contributions: More Bang for Your Buck

Because both your employer and the State contribute to your fund, the total going into your pot for every euro you save is much higher than if you were saving alone.

• Low Cost for Entry

Initial contribution rates (1.5%) are modest and phased in, giving you time to adjust without a big hit to take‑home pay.

• Flexibility to Opt Out (If Desired)

If auto‑enrolment goes ahead but you prefer not to contribute, or want to continue with a private pension, there will be an opt-out window. Employees may opt out between months 7 and 8 after enrolment; your personal contributions will be refunded (though employer and State contributions remain in the pot).

• Long-Term Security, Even for Those Who Think They Can’t Save

For many workers, especially younger people or those on modest incomes, the new scheme provides a structured, effortless route to build a pension pot over decades.

• Continuity Between Jobs

Because the system is centralised (via NAERSA), your pension pot is less likely to get lost when you change employers, unlike older schemes that sometimes rely on employer-specific plans. This “pot‑follows‑member” approach offers stability and peace of mind.

What You Should Check Before Counting on Auto‑Enrolment

As with any major financial change, there are some caveats, so it’s smart to stay alert:

If you already have a pension (occupational, PRSA or similar), you likely won’t be auto‑enrolled.
Contributions only kick in for earnings up to a threshold (capped annual earnings), so very high earners should check how this affects their retirement planning.
Contribution rates rise gradually over time, what seems small now may increase, so good to budget accordingly.
If you opt out after the six‑month lock‑in, employer and State contributions remain. You may effectively lose out on those top-ups, so wise to think carefully before opting out.

What Employers and Employees Should Be Doing Right Now

With just a few months until the official start date, there’s no time like the present to begin preparing:

Employers

Register with NAERSA as soon as the portal opens (expected from December 2025).
Review your workforce to see who qualifies for auto‑enrolment.
Decide whether you will maintain or extend your own pension scheme (exempting staff) or rely on My Future Fund.
Update or implement payroll systems for deduction and remittance.
Budget for your side of contributions (1.5% rising over time).
Communicate with staff early, so they know what to expect and understand their rights.

Employees

Check if you’re eligible (age 23–60, earnings over €20,000, not already in a pension scheme).
Talk to your employer, ask whether you’re covered by an existing pension or will be enrolled in My Future Fund.
Budget ahead, even though the initial deduction (1.5%) is small, make sure it fits in your wage plan.
Think long term, even small contributions now add up over decades.
If you prefer an existing private pension (or want more flexibility), consider staying enrolled in that instead of auto‑enrolment.

What Auto‑Enrolment Means for Ireland’s Retirement Future

For many workers in Ireland, especially younger employees or those who never started pension saving, auto‑enrolment represents a major shift. It’s likely to drastically increase pension coverage nationwide and reduce the number of retirees relying solely on the State Pension.

For employers, while there’s an administrative and financial cost, the scheme also offers an opportunity, a simpler, state-backed pension solution without the need to build or maintain a private occupational scheme.

As with any big policy shift, success depends on preparation. Employers that plan ahead, and employees who stay informed, stand to benefit.

Author Profile

Adam Regan: Deputy Editor

Features and account management. 7 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com