Ireland’s auto enrolment pension scheme—officially called “My Future Fund“—launches on 1 January 2026, marking the biggest change to workplace pensions in decades. If you’re an Irish employer, this isn’t optional. Auto enrolment will automatically include eligible employees in a retirement savings scheme, with mandatory contributions from you, your employees, and the Government.
At PurpleTree, we’ve been helping Irish SMEs prepare for auto enrolment since the legislation was signed into law in July 2024. In this comprehensive guide, we’ll break down everything you need to know: who’s affected, how much it costs, what your obligations are, and how to get ready before the January 2026 deadline.
Auto enrolment is a new mandatory retirement savings system that requires employers to automatically enrol eligible employees into a pension scheme. Unlike traditional workplace pensions where employees choose to opt in, auto enrolment works in reverse—employees are enrolled by default and can only opt out after six months.
The scheme is designed to address Ireland’s pension coverage gap. Currently, around 35% of private sector workers have no supplementary pension, leaving them reliant solely on the State Pension in retirement. Auto enrolment aims to change this by making pension saving the default for all workers.
The scheme will be supervised by the Pensions Authority, ensuring proper governance and investment management.
From 1 January 2026, employees will be automatically enrolled if they meet all three of these criteria:
This applies to all employment types, including:
Important: The €20,000 threshold applies to total earnings across all jobs. If an employee works multiple part-time positions and earns over €20,000 combined, they’re eligible.
Employees are not automatically enrolled if:
However, employees who don’t meet the age or earnings criteria can opt in voluntarily if they wish to participate.
Contributions are phased in over 10 years to allow both employees and employers to adjust gradually. Here’s the complete breakdown:
| Years | Employee | Employer | Government | Total |
|---|---|---|---|---|
| 1–3 | 1.5% | 1.5% | 0.5% | 3.5% |
| 4–6 | 3.0% | 3.0% | 1.0% | 7.0% |
| 7–9 | 4.5% | 4.5% | 1.5% | 10.5% |
| 10+ | 6.0% | 6.0% | 2.0% | 14.0% |
For every €3 an employee contributes:
This is a powerful incentive for employees—an immediate 133% return on their contribution before any investment growth.
| Years | Employee Pays | Employer Pays | Government Pays | Total Annual |
|---|---|---|---|---|
| 1–3 | €300 | €300 | €100 | €700 |
| 4–6 | €600 | €600 | €200 | €1,400 |
| 7–9 | €900 | €900 | €300 | €2,100 |
| 10+ | €1,200 | €1,200 | €400 | €2,800 |
| Years | Employee Pays | Employer Pays | Government Pays | Total Annual |
|---|---|---|---|---|
| 1–3 | €750 | €750 | €250 | €1,750 |
| 4–6 | €1,500 | €1,500 | €500 | €3,500 |
| 7–9 | €2,250 | €2,250 | €750 | €5,250 |
| 10+ | €3,000 | €3,000 | €1,000 | €7,000 |
Employer and Government contributions are capped at a gross annual salary of €80,000.
Example: An employee earning €100,000:
While auto enrolment is mandatory for employers, employees have flexibility to opt out or suspend their contributions.
Employees can opt out during specific two-month windows:
What happens if they opt out:
Employees can suspend their contributions at any time without getting a refund:
This flexibility recognises that financial circumstances change—employees might need to suspend contributions temporarily during periods of financial difficulty.
Auto enrolment brings significant new obligations and costs for Irish businesses. Here’s what you need to know:
Year 1–3 Cost (1.5% of salary):
Year 10+ Cost (6% of salary):
Non-compliance with auto enrolment can result in:
The Pensions Authority will have enforcement powers to ensure employers meet their obligations.
If you already offer a workplace pension, you might not need to make major changes—but you need to check carefully.
Employees are exempt from auto enrolment if they’re already in:
If your current pension scheme doesn’t meet the criteria, you’ll need to either:
Key Consideration: Many existing schemes are voluntary (employees choose to join). Auto enrolment is mandatory—you must enrol all eligible employees by default.
| Feature | Auto Enrolment | Typical PRSA/Occupational Pension |
|---|---|---|
| Enrolment | Automatic (mandatory) | Voluntary (employee opts in) |
| Government Contribution | Yes (0.5%–2%) | No |
| Portability | Yes (pot follows member) | Varies |
| Administration | Centralised (NAERSA) | Employer/provider managed |
| Contribution Flexibility | Fixed rates only | Often flexible |
The National Automatic Enrolment Retirement Savings Authority (NAERSA) is a new public body established to run the scheme.
NAERSA will offer a default investment strategy (lifecycle fund) that automatically adjusts as employees approach retirement. Employees will also have limited alternative fund choices.
Funds will be managed professionally with oversight from the Pensions Authority to ensure prudent investment practices.
The January 2026 deadline is closer than you think. Here’s your action plan:
Auto enrolment launches on 1 January 2026. This is a firm start date following a delay from the originally planned September 2025 rollout.
In Years 1–3: 1.5% employee, 1.5% employer, 0.5% Government (3.5% total)
By Year 10+: 6% employee, 6% employer, 2% Government (14% total)
Rates increase every three years.
Yes. Employees can opt out during a two-month window after 6 months of being enrolled, and again each time contribution rates increase. If they opt out, they receive a refund of their own contributions but employer/Government contributions remain in their fund.
Yes, as long as they meet the eligibility criteria: aged 23–60, earning €20,000+ annually, and not already in a pension scheme. Hours worked don’t matter—only age, earnings, and pension status.
The pension pot follows the employee to their new job under a “pot-follows-member” system. There’s no need to set up a new pension—NAERSA manages the transfer automatically.
Yes. Auto enrolment is a centralised state-run scheme with mandatory enrolment and Government top-up contributions. PRSAs are individual pension products offered by private providers with no Government contribution. However, employees already contributing to a PRSA with employer contributions are exempt from auto enrolment.
Employer and Government contributions are capped based on a salary of €80,000. Employees can contribute on higher salaries, but employer/Government matching stops at €80,000.
It depends. Directors who are employees for PRSI purposes are included. Directors who are self-employed for PRSI purposes (usually those with controlling shareholdings) are not eligible.
Simple formula: Number of eligible employees × Average salary × Employer contribution rate
Example: 20 employees × €35,000 average salary × 1.5% = €10,500/year (Years 1–3)
They’re eligible for auto enrolment. The €20,000 threshold applies to combined earnings across all employments. Each employer must enrol them and contribute based on the earnings paid by that employer.
Auto enrolment represents a significant change for Irish businesses. At PurpleTree, we’re helping SMEs get ready with:
Our HR Duo software integrates seamlessly with auto enrolment requirements:
We’ll help you create:
With just weeks until the auto enrolment pension launch, now is the time to act. The businesses that prepare properly will handle the transition smoothly. Those that wait until January 2026 will face rushed compliance, potential errors, and stressed HR teams.
Don’t leave it until the last minute.
Contact PurpleTree today and let our experienced team guide you through auto enrolment pension preparation. We’ve helped hundreds of Irish SMEs navigate complex HR compliance—auto enrolment is just the latest challenge we’re ready to solve with you.
Get a Quote | Contact Us | Book a Demo of HR Duo
About PurpleTree: We’re Ireland’s trusted HR partner for SMEs, providing practical compliance support, cloud-based HR software (HR Duo), and expert advice on employment law, workplace relations, and health & safety. Our senior advisors—Mary (Legal), Seán (Workplace Relations), and David (Safety & Compliance)—bring decades of experience helping Irish businesses work smarter.
Auto-enrolment – Employer frequently asked questions (Gov.ie)
Automatic Enrolment Retirement Savings System Act 2024 (irishstatutebook.ie)
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