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Pension Auto Enrolment in Ireland: What Employers Need to Know

The Minister for Social Protection has presented to government the final design principles for a proposed auto-enrolment retirement savings system for Ireland. Automatic enrolment in Ireland is being mooted as a measure that could bridge the pension gap. But how will auto-enrolment pension work and how will it affect your pension plan?

The objective of the proposed auto-enrolment scheme is to ensure that every worker will have access to a workplace pension to supplement the basic state pension.

The aim is to increase the active participation of the private sector workforce in supplementary pension provision from a current level of approximately 35%, as measured by the Central Statistics Office, to the long since stated government policy objective of 70% and beyond.

The proposal, which is scheduled to go live in the first quarter of 2024 will mean that all employees not already contributing to an existing employer pension scheme who are aged between 23 and 60 and earning €20,000 or more across all employment, will be required to automatically enrol in the new scheme.

The proposed design, which is still subject to specific draft legislation to be passed by the Dail, envisages matching contributions from employers and employees, with a 33% uplift of the employee contribution from the State in lieu of income tax relief. The initial contribution proposed is 1.5% by both employer and employer and a 0.5% state contribution, totalling 3.5% of an employee’s salary, in year one.

The phase-in of the scheme will mean that contribution requirements will increase every three years by 1.5% for employer and employee, reaching a total contribution of 14% in year 10, made up of 6% each for employers and employees and 2% from the state. These contributions will apply to earnings up to €80,000.

These contributions will range from 1.5% to 6% depending on employee’s length of service and contributions will be collected by Revenue.

Years Employee Contribution Employer Contribution Government Contribution
1 – 3 1.5% 1.5% 0.5%
4 – 6 3% 3% 1%
7 – 9 4.5% 4.5% 1.5%
10+ 6% 6% 2%

While the proposed scheme is voluntary, the approach is opt-out rather than opt-in. Employees will be able to opt-out after month six following commencement and after six months of each tri-annual increase within a two-month window, with employees to receive a refund of their own contributions.

You are also required to stay up to date with any changes to the legislation and ensure that you are compliant with the regulations.

Failure to comply can result in penalties and legal action.

It’s important to note that full details of auto-enrolment are still to be set.


Reasons to set up your own pension scheme.

Companies that already operate a Defined Contribution Scheme for employees could be exempt from implementing the auto-enrolment scheme.

The really good news is that contributions to a pension scheme are tax-deductible (however the use of State top-up tax incentivisation, such as auto enrolment, has been criticised as overly complex given its interaction with the tax relief in schemes).

Offering a workplace pension scheme (rather than a state mandated scheme) is an attractive benefit for employees.

By enrolling employees in your pension scheme, you are demonstrating your commitment to their financial wellbeing.

This can help to attract new employees and retain existing ones, improving your company’s overall retention rates and reducing recruitment costs.

Auto enrolment is scheduled to go live from the first quarter of 2024.

The Small Firms association are lobbying to delay the rollout, leaving you a short period of time to get ahead of auto-enrolment and set up your own Company Pension.

Get in touch with us now to discuss your options, arrange a consultation with one of our Rockwell experts at or +353 1 296 6120

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