Auto-enrolment – the “transformative scheme” people don’t know about

Auto-enrolment – the new retirement savings scheme for Irish employees – will commence in January 2026 but research suggests many employers and employees are unaware of how it will affect them.

Research found 70% of people surveyed were unaware of Government plans to introduce pension auto-enrolment (AE). The scheme will be rolled out to over 750,000 workers with no form of occupational pension cover, but a survey by Standard Life found 46% of people in that group were unaware of the plans. So what does auto-enrolment mean for employers and employees?

Auto-enrolment and Irish employers

The Government has confirmed that the start date for pension auto-enrolment is to be 1 January 2026 (previously 30 September 2025).

Minister for Social Protection Dara Calleary said one reason for the move was to align the new system with the standard tax year. It is also being delayed to give additional lead-in time for employers, particularly those in small and micro businesses, to ensure compliance.

Despite the delay, and given the changes required, the timeline to implement auto-enrollment correctly will be a challenge for many businesses, especially considering the usual end of year accounting pressures and the fact that many key staff will take time off at this time.

Employers need to take action now, especially for employees who not currently enrolled in a pension plan.

• Employers should identify all employees who will or could be affected by AE. What are your obligations?
• Consider potential impacts on existing pension plans, and if there will be a need to operate different pension arrangements.
• Understand the cost implications.
• Start communicating with employees about the changes now.

Auto-enrolment and Irish employees

Under the AE plan, employees and employers will initially each pay 1.5% of gross salary into the scheme. Contributions will be raised over 10 years, increasing every three years until they reach 6%.  Employers match employee contributions, and the State then top up.

• Employees who earn more than €20,000p/a, between 23 and 60, and who do not have a pension scheme will be automatically enrolled into the new system.
• People earning under €20,000, and those outside the age bracket will also be able to opt in, as long as they aren’t already in a pension scheme.
• Each €3 contributed by employees will be matched by their employer, with the State adding a further €1.
• Employer and State contributions will be capped at €80,000 per year.
• Irish executives with pension funds over the standard fund threshold of €2m may be caught by auto-enrolment’s broad net and will need to take action if so.

Despite the lack of awareness around auto-enrolment, sentiment towards pensions generally remains positive. Nearly 78% of workers say an employer’s contribution towards their pension is a very important factor when considering a new job.

This “transformative scheme”  has been described as a once-in-a-generation pension policy and it’s likely to create challenges for businesses as it rolls out, says Caroline Codd, our payroll manager. Payroll, in particular, will need to stay well ahead of the scheme’s introduction and implementation.