AUTO-ENROLMENT (AE)– THE STORY SO FAR
Auto-enrolment (AE) is a new retirement savings system for employees that will be introduced on 1st January 2026. A new public body, the National Automatic Enrolment Retirement Savings Authority (NAERSA), will administer the scheme under the supervision of the Pensions Authority. Called ‘My Future Fund’, under auto-enrolment the employee, employer, and Government all pay a certain amount into the employee’s pension fund.
WHAT DOES THIS MEAN FOR MY COMPANY?
All companies with employees in Ireland, regardless of size or structure, are obliged to facilitate the auto-enrolment scheme for employees who meet the eligibility criteria and for those who wish to opt in. It will also be mandatory for employers with eligible employees (or those employees who ‘opt-in’) to contribute to automatic enrolment when it is launched.
WHO WILL BE AUOMATICALLY ENROLLED?
Employees who meet the following conditions will be automatically enrolled:
- those aged between 23 and 60
- those earning more than €20,000 per year
- those not currently paying into a work or private pension through payroll (i.e. not currently a member of a company pension scheme)
For those individuals not in a company group scheme, who are outside the age and earnings parameters but would like to take part in Auto-Enrolment, they will have the option to opt in. Any apprentices currently employed will be treated the same as any other employee, and if they meet the eligibility criteria they will be enrolled.
For those employees already in your existing company scheme with a record of contributing via payroll (either employee contributions and/or employer contributions) the employee will not be enrolled in AE.
PREPARING FOR AUTO-ENROLMENT
As AE is still a work in progress and the State is working to finalise the offering, there are some things you should consider in order to prepare your company prior to the September roll out:
- The Automatic Enrolment Retirement Savings Systems Act 2024 does not affect existing legislation.
- If you have an existing pension scheme in place, this will continue to run in parallel to auto-enrolment.
- The auto-enrolment legislation does not provide for employers to automatically enrol their employees into their existing pension scheme.
- If you do not have an existing scheme and there is no other pension provision in place, employers will still have an obligation to offer access to a PRSA for employees who wish to avail of it.
- You have the option of setting up a new provision for your employees (for example a Group PRSA plan) or signing up your existing employees to your existing scheme prior to the September roll out.
Understanding AE and the impact to your company does not need to be a daunting task. Growth Investments is here to advise you through the process and steps involved, offering you the most relevant information so you can be sure of the right fit for you and your employees. Contact us today to find out more.
