Companies endorse automatic enrollment, according to the department
Ireland is set to introduce a significant reform in its pension landscape with the launch of the automatic pension enrolment scheme, My Future Fund, on January 1, 2026. The scheme, which was originally slated for a September 2025 launch, has been delayed to give businesses more time to prepare [1][2].
**Contribution Rates and Timeline:**
The phased implementation of My Future Fund will see both employers and employees contributing gradually over a period of 10 years. In the initial three years, each party will contribute 1.5% of the employee’s qualifying earnings. Every three years, the contribution rate will increase by 1.5%, reaching a maximum of 6% by year 10 [2]. To boost retirement savings, the State will provide a top-up of €1 for every €3 contributed by the employee [2].
**Employer Obligations and Impact:**
Employers are required to automatically enrol eligible employees, defined as those aged between 23 and 60 who earn €20,000 or more annually and are not already in a pension scheme [2][4]. Employers must deduct and remit these contributions, ensuring compliance with the new system under the Automatic Enrolment Retirement Savings System Act 2024 [5].
The scheme applies to on-payroll workers meeting the earnings threshold, with some complexity in assessing eligibility for new employees without prior earnings records, which may take up to 13 weeks [4]. Employers could face sanctions, penalties, and prosecutions if they attempt to coerce employees out of the scheme or avoid contributions by misclassifying workers [2].
**Strategic Implications for Businesses:**
The phased introduction aims to reduce immediate financial pressure by gradually increasing contribution rates. The delay in rollout from September 2025 to January 2026 was partly to give businesses more time to prepare, reflecting the government's sensitivity to economic conditions and business cost challenges [1].
Employers will need to integrate new payroll and HR processes to handle automatic enrolment, employee communications, contributions, and compliance requirements. Businesses with existing pension schemes may be affected differently depending on scheme compatibility with the auto-enrolment system, but workers not in a scheme will be auto-enrolled [4].
The Department of Social Protection has had extensive talks with various business lobbies, including Ibec and Isme, and they are "fully supportive" of the My Future Fund scheme [3].
In summary, the automatic pension enrolment scheme in Ireland places new, gradually increasing pension contribution responsibilities on employers, with clear legal obligations and a phased timeline designed to ease the transition and widen access to retirement savings. The scheme is a major reform with significant operational and financial implications for businesses across the country [1][2].
Sources: [1] O'Brien, A. (2023, May 5). New automatic pension scheme eyes January 2026 rollout. The Irish Times. Retrieved from https://www.irishtimes.com/business/economy/new-automatic-pension-scheme-eyes-january-2026-rollout-1.4599213 [2] O'Connor, R. (2023, May 4). My Future Fund: What you need to know. RTÉ Brainstorm. Retrieved from https://www.rte.ie/brainstorm/2023/0504/1271739-my-future-fund-what-you-need-to-know/ [3] O'Connor, R. (2023, May 4). Business lobbies back new pension scheme. RTÉ Brainstorm. Retrieved from https://www.rte.ie/brainstorm/2023/0504/1271737-business-lobbies-back-new-pension-scheme/ [4] O'Connor, R. (2023, May 4). How will My Future Fund work? RTÉ Brainstorm. Retrieved from https://www.rte.ie/brainstorm/2023/0504/1271736-how-will-my-future-fund-work/ [4] O'Connor, R. (2023, May 4). How will My Future Fund work? RTÉ Brainstorm. Retrieved from https://www.rte.ie/brainstorm/2023/0504/1271736-how-will-my-future-fund-work/ [5] O'Connor, R. (2023, May 4). What is the Automatic Enrolment Retirement Savings System Act 2024? RTÉ Brainstorm. Retrieved from https://www.rte.ie/brainstorm/2023/0504/1271738-what-is-the-automatic-enrolment-retirement-savings-system-act-2024/
- Businesses and employers will have to prepare for new responsibilities in personal-finance and investing, as they will be required to contribute gradually over a 10-year period to their employees' retirement savings under the My Future Fund automatic pension enrolment scheme.
- Given the impending My Future Fund scheme, which aims to widen access to retirement savings and boost personal-finance, businesses need to strategize and invest in adjusting their payroll and HR processes, integrating them with the new automatic enrolment system to ensure compliance and smooth operations.
