Auto-enrolment pension is a new retirement savings system for employees that automatically enrolls eligible workers into a pension scheme. In this week’s blog Nuala McGowan, CPA, ACA, AIA and founder of McGowan Accountancy Servies explains how the new scheme will work.
The introduction of the Auto-Enrolment Retirement Savings Scheme, called My Future Fund, will start from 1 January 2026.
Under the scheme, the employee, employer, and Government all pay a certain amount into the employee’s pension fund.
A new public body, the National Automatic Enrolment Retirement Savings Authority, NAERSA, has been set up to administer the auto-enrolment scheme. The scheme is supervised by the Pensions Authority.
You will be automatically enrolled in the new pension scheme if you are an employee and:
- You are aged between 23 and 60
- You are not currently part of a pension plan
- You earn €20,000 or more per year
If you previously contributed to a pension but now do not, and you meet the other conditions, you will be automatically enrolled.
If you earn less than €20,000 per year, or you are not aged between 23 and 60, you can choose to join the pension scheme if you are not already part of a pension plan.
Does my employer have to participate?
If your employer does not meet their auto-enrolment obligations, they will be subject to penalties and possibly to prosecution. If they don’t make contributions on your behalf, they may be fined and have to make repayments with interest.
What happens if I already have a workplace pension?
You will not be enrolled in the new auto-enrolment scheme if you are paying into a workplace pension plan. You can read more about occupational pensions on our website.
What happens if I change jobs after being enrolled?
If you change jobs after being automatically enrolled, you won’t need to change pension or join a new scheme. You will remain a member of the auto-enrolment scheme. You do not have to do anything, as the National Automatic Enrolment Retirement Savings Authority will manage the change.
Is auto-enrolment better than my personal pension?
Whether auto-enrolment or your personal pension is better for you depends on your situation and circumstances.
You should review your personal pension and compare it with the benefits of auto-enrolment to see what works best for you.
Can I opt-out of (leave) the pension scheme?
After you are enrolled, you must stay in the pension scheme for at least 6 months. You can opt out after 6 months but before you have been in the scheme for 8 months.
Your contributions will be refunded.
Opting out after a change in the contribution rate
When there is a change in the contribution rate, you can choose to opt out 6 months later, up to 8 months later.
You will be refunded the amount of the increase in the contributions rates you paid in those months.
Suspending your contributions
You can also suspend (pause) your contributions at any time after the first 6 months. All contributions, including those from your employer and the Government, will be suspended.
All the existing contributions in your fund are kept there until you start making contributions again.
If you suspend your contributions, you must wait at least 12 months before you can start making contributions again.
What happens to my savings if I opt-out?
Contributions that are not refunded, including those made by your employer and the Government, stay in your savings pot and will continue to be invested.
If you stop working or move abroad at any time before retirement, you will stay enrolled, but you will not make additional contributions. Your existing savings will continue to be invested.
This means you can still access a pension pot at retirement.
Automatically re-enrolled after 2 years
If you leave the plan or suspend your contributions, you will be automatically re-enrolled after 2 years if you are still eligible for the scheme.
However, if you are making contributions to another pension plan through your employer’s payroll, you will not be re-enrolled for that employment.
The amount you pay will be a set rate of your annual salary. Your employer will match your contributions, and the Government will contribute an additional amount. You cannot pay more or less than the set rate.
You and your employer will pay 1.5% of your annual salary in the first year. This will increase to 6% by year 10.
For more information on this topic contact Nuala McGowan on 090 66 25818 or 086 0352849 or email nuala@mcgowanaccountancy.com