Auto-enrolment: Your questions answered

What auto-enrolment is

Auto-enrolment is a new retirement savings scheme which people will automatically be enrolled in once they meet certain requirements. It has been set up to provide a retirement plan for people without a work or private pension to save for retirement.

Why auto-enrolment is being introduced

There are two main reasons:

• not many people have work or private pensions and will only depend on the State Pension when they retire. This means that they may experience a drop in income when they retire which could lead to a fall in their standard of living
• Ireland has an aging population, in the future there will be fewer people of working age to support the retired population. To make sure people have enough money when they retire, it is important that people start saving for their future now

When auto-enrolment will be introduced

Auto-enrolment will begin on 30 September 2025.

Who will be automatically enrolled

You must meet these conditions to be automatically enrolled:

• be aged between 23 and 60
• earn more than €20,000 per year
• not currently be paying into a work or private pension through payroll

Who will run the auto-enrolment retirement savings system

Auto-enrolment will be run and managed by a new independent body set up by the Department of Social Protection, called the National Automatic Enrolment Retirement Savings Authority (NAERSA).

How auto-enrolment will be regulated

The auto-enrolment scheme will be supervised by the Pensions Authority. It will have statutory independence and will be governed by a Board of Directors.

The Financial Services and Pensions Ombudsman services will also be available to participants.

If I’m working and drawing down a pension will I still be enrolled?

Income from pensions will not be assessed for eligibility. However, you will be automatically enrolled if you are working as an employee, aged between 23 and 60, earn €20,000 or more through your employment(s) and if you or your employer are not currently contributing to a supplementary pension through payroll.

If my earnings go below €20,000 a year will I stay in the scheme?

If you have been enrolled and your earnings subsequently go below €20,000 per year, you will stay in the scheme.

Will auto-enrolment replace the State Pension?

No, auto-enrolment is designed to increase people’s retirement savings. It will provide a new way for workers to save for their future. The purpose is to supplement the State Pension and not to replace it.

If you already have a work pension or personal pension

• if you already have a pension that you are actively paying into through payroll (that means directly from your payslip), you are not eligible for the scheme
• if you have more than one job, and the additional job(s) do not have a pension scheme into which you or your employer are contributing to through payroll then you will be automatically enrolled for those jobs if your combined wages are more than €20,000

If you used to contribute to a pension but don't anymore

If you are no longer contributing to a work or personal pension, and you meet the other requirements, you will be automatically enrolled.

Can employees keep contributing to their personal pension and be eligible for auto-enrolment?

Any employment where you are not contributing to a personal or occupational pension through payroll and you meet the other eligibility criteria, you will be automatically enrolled.

Any employment where you are contributing to a personal or occupational pension through payroll, you will not be eligible for the scheme for that employment. However if you have another employment for which you are not contributing to a pension through payroll, you may be enrolled in respect of that employment.

If you are auto enrolled and later start contributing to a personal or occupational pension through payroll, that employment will become exempt from auto-enrolment.

How will NAERSA know that an employee has a private pension?

NAERSA will not be able to tell if you have a private pension plan that you are contributing to outside of payroll. If you meet the eligibility criteria, you will be automatically enrolled. Therefore, it is up to you to decide whether to continue contributing to both.

Should employees cancel their personal pension so they can be automatically enrolled?

We cannot advise if auto-enrolment or your current personal pension is better suited to your situation. The best option for you depends on your own circumstances, taking into account factors like tax relief, contribution amounts, charges and ancillary benefits.

Will employees be able to take out a private pension after being automatically enrolled?

It will be possible to remain a participant in the auto-enrolment scheme and pay contributions to another pension scheme outside of the payroll system.

Can employees get the State top-up in my occupational or personal pension?

No, the State will top up contributions in the auto-enrolment scheme at a rate of €1 for every €3 the employee contributes. This is equivalent to 25% tax relief. Other pension schemes will continue to be supported by tax relief, which can reach up to 40% depending on your earnings level.

What happens to your savings if you opt-out?

Contributions that are not refunded (including the employer and State contributions) will stay in your savings pot and will continue to be invested on your behalf. So even if you opt out, you’ll still have a pot to drawdown/access at the retirement age of 66.

Are there penalties if employees keep opting out?

No, there will be no penalties for employees who continuously opt out of the scheme.

Security of your savings

Your auto-enrolment pot will not be guaranteed by the State. This is the same as any other pension or savings plan.

The State, through auto-enrolment, is helping you save for your retirement, but the funds do not belong to the State. Each individual participant will build up their own pot of money that belongs to them.

The State will not have any claim over that money and will not have any right in the future to use it for any purpose. It will always be your personal property, accessible at the retirement age of 66.

The State is taking a number of steps to ensure that the money invested on your behalf stays as safe as possible, including:

• choosing low risk investments in the default strategy
• supervision by the Pensions Authority
• using only regulated funds for investing your savings
• contracting only with reputable investment companies that are fully regulated by the Central Bank of Ireland

What happens if you stop working?

If you stop working at any time before State Pension age, you will stay enrolled, but won’t make any contributions. Instead, your savings will continue to be invested for you. If and when you start to work again, you will begin making contributions, as long as you are not paying into a supplementary or occupational pension with your new job and still meet the eligibility criteria.

What happens if you emigrate?

If you emigrate, your savings pot will continue to be invested and you will have access to it at State Pension age. All employee, employer and State contributions until that time will remain in your savings pot, and all contributions will cease.

If you return to Ireland to work, you may be enrolled again if you meet the criteria at that time.

How will my savings be taxed?

The Department of Finance is in the process of legislating for the tax treatment of AE in a similar way to that applied to a PRSA. In summary, that Department will ensure:

• the State top-up will be provided instead of tax relief on employee contributions
• the State top-up contributions will not be subject to tax for the employee
• investments will grow tax free
• the drawdowns will have a tax-free lump sum of up to 25% of the fund, with the balance subject to income tax, and with Revenue to apply ‘trivial pensions’ treatment where appropriate

If your employer doesn’t pay the contributions

There are protections in the legislation to ensure that your employer must make contributions on your behalf. If they do not, they may be subject to fines and repayments with interest.

Will I have to pay fees?

The Department of Social Protection is in the process of developing a transparent and fair fee model for ‘My Future Fund’, designed to provide value to participants while ensuring the saving system’s long-term sustainability.

Charges will be set and fully explained nearer the launch date of 30th September 2025, but it is expected they will comprise –

• A modest weekly flat fee to cover the running of NAERSA’s administrative costs, and
• An investment management charge based on a percentage of participants’ savings

The Department of Social Protection will ensure that all fees are kept to a minimum. It is expected that over the medium to long term, total participant charges will be well below the stated target of 0.5% of assets under management.

Participants in AE will know exactly what they're paying as they will receive an easy-to-understand annual statement, which will be accessible online.

Administration fees will not be charged on inactive accounts (where a person may have opted out or suspended for a period or started participating in an occupational pension scheme), thereby avoiding the prospect of the gradual erosion of small-value savings pots.

Do family or small companies have to implement Auto-enrolment

All companies with employees in Ireland, regardless of size or structure, will have to facilitate the auto-enrolment scheme for employees who meet the eligibility criteria and for those who wish to opt in.

Employers who prevent their employees from joining the scheme, or who force their employees to opt out or suspend contributions, may be prosecuted and will be subject to fines and penalties. Withheld or underpaid contributions will attract interest payments.

Who is considered an employee for the purposes of auto-enrolment?

An employee for the purposes of auto-enrolment is the same as an employee for tax and PRSI purposes. It is a worker who works for and is paid by an employer, and is not self-employed.

Will Community Employment, Job Initiative, Rural Social Scheme or Tús participants be enrolled in Auto-enrolment?

Participants of Community Employment, Job Initiative, Rural Social Scheme or Tús schemes will not be eligible for the auto-enrolment scheme.

Will Community Employment, Job Initiative, Rural Social Scheme or Tús Supervisors be enrolled in Auto-enrolment?

Supervisors in the Community Employment, Job Initiative, Rural Social Scheme or Tús schemes will be automatically enrolled once they meet the eligibility criteria.

Will apprentices be enrolled?

Apprentices will be treated the same as any other employee, and if they meet the eligibility criteria they will be enrolled.

Will company directors be enrolled?

This depends on the PRSI class that you are contributing as a company director. If you pay PRSI as an employee and meet the eligibility criteria, then you will enrolled. But if you are registered as self-employed then you will not be eligible.

Will new employees be auto-enrolled straight away?

There are no waiting periods for the auto-enrolment scheme. New employees who have an earnings record with Revenue where they have earned €20,000 or more in a year will be automatically enrolled. For new employees who have no previous earnings record or a gap between their previous and new employment, enrolment may take up to 13 weeks while it is established if they will likely meet the earnings threshold.

Will I have to tell my employees when they’ve been enrolled?

Under the auto-enrolment legislation, employers are obliged to inform their employees when they have been enrolled, and to inform them of the date of enrolment.

How will self-employed people be identified?

PRSI classes will be used to exclude self-employed people from auto-enrolment.

WilI employees who have opted for cash in lieu instead of joining a pension scheme be enrolled?

If these employees don’t have pension contributions paid through the payroll and if they meet the age and income eligibility criteria, they will be automatically enrolled.

Will employees who have a pension in another country but are paid through payroll in Ireland be enrolled?

If data provided to the Revenue Commissioners in Ireland does not show active pension contributions and they meet the age and income eligibility criteria, they will be automatically enrolled.

How will the employee’s salary be assessed for eligibility?

Any income reported in the gross pay field on payroll will be assessed. For some employments, it will be clear on ‘Day 1’ that an employee meets the minimum earnings criterion. For others, it might take up to 13 weeks for NAERSA to apply a ‘look back’ at an employee’s earnings in a pay reference period.

Will employers have to contribute to personal pensions now?

No, there are no plans to force employers to contribute to personal pensions if that is outside the terms and conditions of your employment. It will be mandatory for employers with eligible employees to contribute to automatic enrolment when it is launched.

What if employers already have a pension scheme in place for their employees?

Any existing pension scheme will run in parallel to auto-enrolment. Any employees that have a record via payroll of either employee contributions and/or employer contributions will not be enrolled in the scheme.

Can employers automatically enrol employees in their existing company pension scheme?

The auto-enrolment legislation does not provide for employers to automatically enrol their employees into their existing pension scheme. That is a matter for employers and trustees of their pension schemes. Essentially, it depends on the employment contract you have set with your employees.

Will employers still have to provide access to a PRSA?

The Automatic Enrolment Retirement Savings System Act 2024 Act does not affect existing legislation, so you will still have an obligation to offer access to a PRSA for employees who wish to avail of it.

Do existing schemes need to meet standards to be exempt?

No, once there is a pension contribution paid through payroll from an employee or employer, the employee will be deemed as having pension coverage already and won’t be enrolled with respect to that employment. However if you have another employment for which you are not contributing to a pension through payroll, you may be enrolled in respect of that employment.

By the end of year six of the operation of the auto-enrolment scheme, at the latest, standards for the exemption of existing pension schemes will be developed with the assistance of the Pensions Authority.

If an employee opts out do employers still need to pay their contribution?

You won’t have to keep paying employer contributions if your employee opts out of the scheme. When the employee is re-enrolled, a new payroll notification will be available and all contributions will start again.

If an employee is earning over €80,000 across multiple employments (for example two employers paying €50,000 each), how does each employer know how much to pay?

NAERSA will issue the Automatic Enrolment Payroll Notification (AEPN) through payroll software to both employers as normal. When the employee reaches the income threshold of €80,000 within the tax year, the payroll notification to both employers will be updated to reflect that no further contributions are to be paid. A new payroll notification will issue at the start of the next tax year to restart contributions if the employee still meets the eligibility criteria.

Do employers have to also pay contributions for employees who choose to opt in?

Yes, employees who choose to opt in will be treated the same as those who are automatically enrolled, and that means the employee, employer and State will contribute the set rates as outlined above.

Do the contribution rates for my existing scheme have to match the contribution rates under auto-enrolment?

No. The set contribution rates only apply to the auto-enrolment scheme. However, by the end of year six of the operation of the auto-enrolment scheme, at the latest, standards for the exemption of existing pension schemes will be developed with the assistance of the Pensions Authority.

What is included in the definition of salary or earnings for auto-enrolment?

An employee’s gross earnings will be assessed for the income threshold and for the calculation of contributions. This means that anything that’s included in the gross pay field on payroll will be assessable.

How will contributions be paid?

Employers will pay employee and employer contributions directly to NAERSA. It is anticipated that different methods will be available, including variable direct debit. Employers will be able to set this up on the employer portal. More information will be made available closer to launch date.

Will there be additional employer returns to be made by employers or will all the pension deduction information be processed through existing Revenue PAYE returns?

As an employer you will need to make a separate return through payroll directly to the National Automatic Enrolment Retirement Savings Authority. Information on how this process will work will be made available to employers closer to go-live.

The calculation of contributions will be made through your existing payroll software.

Do we need a broker to manage auto-enrolment for us?

No, auto-enrolment will be administered by a central body, the National Automatic Enrolment Retirement Savings Authority, so there is no need to engage the services of a broker.