Auto Enrolment Retirement Savings System Ireland

Auto-enrolment Ireland: Cutting through the noise to explain what matters

Ireland’s pension landscape is undergoing significant change with the introduction of auto-enrolment (AE), a new retirement savings plan for the workforce of Ireland. Its aim is to make it easier to save for retirement and easier for employers to offer their employees a pension plan. It has the potential to help people maintain a higher standard of living in retirement and has been a key focus for Irish Life since its inception.

We have contributed our expert advice to the Irish Government on the topic of Auto-enrolment (AE) since the publication of the first Strawman Consultation. And even went as far as New Zealand to research their KiwiSaver AE scheme and refine our policy in respect of the best approach to AE.

We believe it should be the impetus to drive a positive and pro-active cultural change within Ireland for generations to come, enabling better pension provision and retirement outcomes for all.

The Government intends to introduce auto-enrolment pensions in Ireland on 30 September 2025 so what do employers need to know and how can they prepare?

What do employers need to consider?

Employers need to begin preparing for AE as the act is due to come fully into effect on 30 September 2025 with employers needing to be fully compliant by then. This means they will need to set up access to the Government’s AE system from the end of September 2025 for all employees who are not members of any other company pension scheme. That includes those who have opted out of an in-house occupational scheme, those working through a waiting period and temporary staff.

The new AE system will exist alongside the current occupational pensions system. This means that employers will be able to use their own occupational pension plan (or a Personal Retirement Savings Account) to meet AE requirements instead of using the central system if the plan meets certain minimum standards.

The main initial steps employers need to undertake:

  • Run a gap analysis of their workforce to understand who is actively paying into a pension arrangement through payroll and who is not
  • Employers will then need to decide whether (i) they wish to ensure all employees are included in their occupational pension scheme, or (ii) they want the AE system to apply to those employees not in the existing plan; or (iii) some mixture depending on the different employee groups

Once this decision had been made there may be several steps to be taken to prepare for AE going live, including reviewing contracts of employment and relevant employment policies as well as potentially amending existing pension arrangements.

It is vital that all employers understand the extent to which it might impact them and the immediate and longer-term implications for their business and their employees.

We’re here to guide you through the process, speak to one of our pension experts today.

Company pension plan vs Auto-enrolment

Employer choice and control is a valued part of a company pension plan with employers having the flexibility of choice in who they appoint as their provider, and the type of services delivered within. Whereas the State solution removes any opportunity of choice or control in who provides their company pension plan, and the services delivered. 

There are a number of differences between a company pension plan and AE and to help you understand these differences in greater detail, we have prepared a comprehensive comparison table. Click on the link below to learn more.

 
Read our Comparison Table Button

How can Irish Life Employer Solutions help?

Irish Life Employer Solutions is the No.1 provider of company benefits for Ireland’s employers making it easier for employers and their workforce to take care of their health and financial wellbeing.

We are a trusted partner for Ireland’s corporates and partner with the top 10 Irish employers and 28/30 of the largest FDI employers. Our strong relationships are underpinned by more than 85 years of insight and experience, supported by unrivalled industry knowledge and culture. We work closely with our employers to better understand their needs and provide expertise and insights so we can guide our clients to find the best solution for their organisation and its employees.

The Preferred Solution
We’re here to help you and your organisation get AE ready.
 
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Frequently Asked Questions:

We’ve answered some of the most frequently asked questions for AE below:

 

What is AE?

AE is a government retirement savings scheme for employees who are not already actively paying into a pension arrangement through payroll. The aim of AE is to build a culture of saving for retirement in Ireland. The idea is that in retirement, most workers will have their own pension as well as the State Pension, leading to a better retirement income overall.

*800,000+ workers in Ireland, do not have any pension coverage currently and, as a result, will depend on the State Pension as their main source of income in retirement. This means they may see a drastic reduction in their income and living standards. AE will increase both pension coverage and overall pension adequacy by making it easier for employees to access a quality assured retirement savings plan. This system has been successfully implemented in other countries, such as the UK and New Zealand, with strong results in boosting pension participation rates.

It's important to note that many of these workers would be better off joining their company pension plan. However, for those who can’t avail of that option, there is AE.

 

How will AE work?

Eligibility

AE will apply to every private sector worker in Ireland if they are:

  • Aged between 23 and 60
     
  • earn more than €20,000 per year from all employment
     
  • and are not currently paying into a company pension or personal pension through payroll.

Enrolment is compulsory for the first 6 months with members then having the opportunity to opt-out. Those who opt-out will be automatically re-enrolled after 2 years.

Employees who do not satisfy the age or earnings thresholds will have the right to opt-in to the AE system, if they choose. 

Contributions

  • Contributions will be mandatory and need to be made by the employee and employer with a top up from the government.
     
  • Contributions will start at 1.5% of gross earnings, gradually increasing by 1.5% every three years until both the employee and employer are paying to 6% of gross earnings.
     
  • Employer Match: Employers must match employee contributions up to a specified limit.
     
  • State Top-Up: The government will contribute €1 for every €3 saved by the employee, equivalent to a 33% bonus. This means that somebody earning €40,000 will be contributing €600 per year, and their employer and the Government will be adding €800 to their pension fund between them.
     
  • After three years, the contribution increases to 3.0% and the employer and Government contribution increase proportionally. After another three years, it increases to 4.5%, and after 10 years it increases to 6.0% and remains there. 
 Years       

Employee Contribution

Employer Contribution  

Government Contribution 

0-3

1.5%

1.5%

0.5%

4-6

3%

3%

1%

7-9

4.5%

4.5%

1.5%

10+

6%

6%

2%

 

Source: Houses of the Oireachtas (2024). (Automatic Enrolment Retirement Savings System Act, 2024, p. 51) 

Note: Employer and Government contributions apply only to salaries up to €80,000. If a person earns more than this, the percentage figure for the employer and Government contributions will be limited to the first €80,000 of gross earnings.

Opt-Out Provision

Employees may opt out after the initial six months of enrolment. However, those who opt out will be re-enrolled after two years.

Investment Options

The National Automatic Enrolment Retirement Savings Authority (NAERSA) will provide employees with a limited range of investment options including a low to medium risk default fund, which will operate on a lifestyle basis, together with three other fund options, classified as low, medium, and high risk.

Investment managers will be appointed to provide funds that will form the investment strategy options for the investment of contributions, including:

  • a low-risk strategy
  • a medium-risk strategy
  • a high-risk strategy

You will be placed in a default strategy to begin with and will have the choice to move to one of the other strategies listed above. 

The default strategy will operate on a typical lifecycle basis, which means that the investment risk is decreased as you get closer to retirement. This strategy will see you move from the higher to the medium to the lower risk strategy, based on your age and the number of years remaining until you reach the State Pension age of 66. This strategy takes advantage of high-risk growth in younger years, and the stability of low risk closer to typical retirement age. The default strategy will be structured in a way so that you will not need any financial knowledge or to make choices to get a good retirement income.

Measures will be in place to ensure that these savings, while not guaranteed by the government, will be managed carefully. This includes a rigorous tender process to select investment managers and oversight by the NAERSA Board, the Pensions Authority and the Financial Services and Pensions Ombudsman.

Transferability

Workers can retain their AE pension savings as they change jobs, ensuring flexibility and continuity in their retirement planning. 

Administration Charges

Charges will be set nearer the launch date of 30th September 2025, but it is expected there will be:

  • A maximum Annual Management charge (AMC) and
  • a flat per member charge (to be confirmed).

 

When will AE commence?

Employers need to begin preparing now for AE which is due to come into effect on September 30, 2025. However, employers need to start preparing months in advance to ensure their employees are on boarded into their chosen DC solution in advance of this. So, employers will need to have all their people added into their existing company pension plans of that date, or they will be brought into the State AE system by default. Below is a timeline outlining the key deadlines for employers in becoming AE ready with Irish Life:

 

Key Deadlines for 2025
 

Key Takeaway

At Irish Life, we recognise there is unlikely to be one single approach that is appropriate for all employers and all circumstances. However, our recommended course of action is to have one scheme for all employees which meets the minimum standards for ‘qualifying’ arrangements and avoids the two-tier approach. Preparation must start now to avoid the new central retirement savings system and to retain control over key areas ensuring all staff have the same employee benefits experience.
Action Plan to be AE Ready
And to help you get AE ready, Irish Life has created our SecureShare solution which is a new portal that allows employers to simply and easily onboard new members. Through SecureShare, employers can submit large amounts of data quickly, securely and accurately. If you would like to discuss how your organisation can become AE ready, please get in touch with your usual Irish Life contact or alternatively, please email us at AEready@irishlife.ie.
 
[1] Auto-Enrolment Guide for Employees | Gov.ie – March 2024 [2] Population Ageing and the Public Finances in Ireland | Department of Finance – September 2018 [3] Automatic Enrolment Retirement Savings System Act, 2024 │ Houses of the Oireachtas 2024
 
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