Auto-Enrolment snapshot: guide for employers and managers

Your practical, need-to-know guide for employers and managers

Ireland, June 2025

 1.      What is Auto-Enrolment?

‘Auto-Enrolment’ is the shorthand for the new pension/retirement savings scheme, Auto-Enrolment Retirement Savings Scheme (also called My Future Fund).  This will put in place an automatic system, aimed to be introduced nationwide by the Department of Social Protection on January 1st, 2026.  The employer must contribute to the Auto-Enrolment Retirement Savings Scheme for all eligible employees.

2.      Who does Auto-Enrolment affect?

Auto-Enrolment is being put in place to benefit PAYE employees.  The introduction of Auto-Enrolment will not affect your business status with sole traders/contractors.  Your employees who meet the following criteria on January 1st, 2026, will be automatically included in the coming system;

• Are not enrolled in a pension scheme,

• Earning in excess of €20,000.00 per year, and

• Are aged between 23 and 60.

3.      What will Auto-Enrolment cost my business?

Under Auto-Enrolment, the employee, the employer and the State, will all contribute to the employees’ retirement savings.   For every €3.00 that an employee contributes, their employer will contribute an additional €3.00.  To this amassed €6.00, the State will contribute an additional €1.00.  In short, for every €7.00 being contributed to the employee’s retirement savings account, €3.00 will be coming from their employer.

What are the practical figures?

The employee and employer will contribute (respectively) a set rate of 1.5% of the employee’s annual salary in the first year.  This will increase incrementally to 6% by year 10 of the scheme.

 Both the employer’s and the States’ contributions are capped at €80,000.00 gross annual salary.  If the employee earns over €80,000.00 gross annually, the employee may opt to contribute more than the cap amount, but the employer cannot match their contributions into this scheme on any income in excess of the €80,000.00 gross annual cap.

4.      Who controls Auto-Enrolment?

The Department of Social Protection is the Department responsible for overseeing the introduction and implementation of the Auto-Enrolment policy and general framework.  This will be practically managed and administrated by a newly established independent body, the National Automatic Enrolment Retirement Savings Authority (NAERSA).  The Pensions Authority will supervise and provide oversight on the induction and implementation, to ensure compliance with both EU and Irish regulations.

5.      What if my employees want to opt-out?

While employees can choose to opt out of, or suspend their contributions to the scheme, employers must still contribute to the scheme for all their eligible employees.

After being enrolled, employees must stay in the scheme for at least six (6) months.  Employees may choose to suspend their contributions at any time upon entering the scheme.  An employee’s contributions will be refunded to them if they choose to opt-out any time after six (6) months.  The employers’ and States contributions will not be refunded; they will stay in the schemes’ savings account and will continue to be invested by NAERSA.

If the employee leaves your employment, they will remain in the scheme, but theirs, yours and the States contributions will be suspended until they re-enter a PAYE position, which meets the minimum Auto-Enrolment criteria.

If an employee opts out of, or suspends their contributions into the scheme, they will be automatically re-enrolled after two (2) years (if still eligible).

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