Over 50% of Irish SMEs are running out of time to act on auto-enrolment, survey finds.

It’s imperative to act now: This once-in-a-generation pension policy change will create huge challenges for unprepared businesses, says Caroline Codd, our payroll manager. 

Starting on 1st January 2026, auto-enrolment will be difficult for businesses who are not preparing now, especially considering the usual year-end accounting pressures and the fact that many key staff will take time off. 

Payroll, in particular, will need to stay well ahead of the scheme’s introduction and implementation.

The Government has confirmed that the start date for pension auto-enrolment (AE) is 1 January 2026. Minister for Social Protection Dara Calleary said one reason for the move was to align the new system with the standard tax year. Given the changes required, the timeline to implement auto-enrolment correctly will be a challenge for many businesses.

According to a survey in May, half of Irish companies with fewer than 50 employees are not prepared at all, even though they are more concerned than larger firms about the impact of the regime. If this is your business, it’s time to act.

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

1. Employers should identify all employees who will or could be affected by AE. What are your obligations?
2. Consider potential impacts on existing pension plans, and if there will be a need to operate different pension arrangements.
3. Review contracts of employment to ensure details of the AE are included
4. Understand the cost implications.
5. Start communicating with employees about the changes now.

NAERSA

AE contributions will be collected by the National Automatic Enrolment Retirement Savings Authority (NAERSA). NAERSA will be responsible for allocating investment returns and offering back-office support. They will also operate an online portal for employers and employees.

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 €2mmay be caught by auto-enrolment’s broad net and will need to take action if so.

Act now if using existing pension plans for AE compliance

For companies planning to move AE-eligible workers into their own existing defined contribution pension plans, it’s imperative to act now,  said Shane O’Farrell, director of workplace markets at Irish Life’s employer solutions unit, in a recent interview with The Irish Times.

“Companies intending to use their existing plan to achieve AE compliance, as many of them are, should get their ducks in a row well before the official January implementation date if they want to get their staff safely embedded with their own plans. Employers should aim to have the first pension contributions for newly enrolled staff by mid-November. This will avoid the risk that employees are enrolled into the State AE model by default, because they lack a history of pension contributions in their current employment.”