From 30th September 2025, anyone who does not have a pension scheme, earns more than €20,000 per year and are aged between 23 and 60, will be automatically enrolled into the new system established by the Automatic Enrolment Retirement Savings Bill 2024.
On Tuesday 26th November, Fórsa hosted officials from the Department of Social Protection to explain what auto-enrolment pensions would mean for workers and answer questions on more specific circumstances.
Here is what we learned:
Why is an auto-enrolment pensions scheme needed?
Supplementary pension coverage in Ireland is low, especially in the private sector where two thirds of workers are not paying into a pension scheme. ICTU has expressed concerns over whether the state pension alone is enough for a worker to live on comfortably after retirement.
The auto-enrolment pension scheme is designed to ensure that workers will not have to rely on the state pension alone.
Who will be affected?
Workers will be automatically enrolled in the pension scheme only if they meet three criteria: they are between the ages of 23 and 60, they earn more than €20,000 per year, and they do not already have a pension scheme.
This means most workers in the public sector will not be affected by the auto-enrolment pensions scheme as they already have pension schemes included as part of their employment conditions.
For workers outside of the age and income thresholds, there is an option to opt-in to the pension scheme. This will be available through the mygov welfare portal.
How much will workers pay in contributions?
In the first three years of the scheme workers will pay 1.5% of income automatically, with employers matching the 1.5% and the state adding 0.5%. In years four to six that will rise to 3% and 1% respectively, in years seven to nine it will rise 4.5% and 1.5%, and from year ten onwards rates will be set at 6% for workers and employers and 2% for the state.
State and employer contributions are capped at the first €80,000 of income. This means in the first three years the state will not pay more than €1,200 (1.5% of €80,000) and the state will not pay more than €400 (0.5% of €80,000).
Workers can contribute more to their pension if they wish, but the state and their employer will not match their contributions past that point.
Can workers leave the auto-enrolment pension scheme?
The only way for a worker to leave the pension scheme is to either no longer meet the three requirements or to move to another pension scheme.
However, after six months workers can suspend their pension for a two-year period. After this period, they will be re-enrolled and will need to wait another six months before they can suspend their pension again.
When the contribution rate changes at the beginning of years four, seven and ten, there will be a two-month period where workers can withdraw from the scheme and receive a refund on their pension savings. This will not be a complete refund to ensure that a small amount remains for retirement.
Can workers transfer their auto-enrolment pension savings to another pension scheme?
No, any savings in the auto-enrolment pension scheme are non-transferable.
What happens if a worker leaves their job?
When a worker leaves their employment, whether that be for a new employment or a break in employment, the money they paid into their pension will remain and payment will resume in their next employment should they still meet the three criteria or opt-in.
What about workers with two jobs?
For workers with multiple employments, each employer will be required to pay into their pension. The pension payments will be applied to the overall income, meaning workers cannot pay into the pension scheme for one employment and not the other.
Will contract workers also be covered?
Contract workers will also be covered by auto-enrolment pensions. Their contributions will be covered in a look-back period at the end of the year.
Will the auto-enrolment pension scheme replace the state pension?
No, the auto-enrolment pension scheme is designed to supplement the state pension.
How will it be decided whether a worker qualifies for auto-enrolment?
Auto-enrolment will be judged using data provided by the Revenue Commissioners. The decision will be based on a worker’s payroll information. This means workers who are not on a payroll (self-employed, etc.) will not qualify for auto-enrolment.
Who will oversee the pension scheme?
A state-owned body, the National Automatic Enrolment Retirement Savings Authority (NAERSA), is to be set up to administer collections and payments, while pension funds will be managed by private investment firms.
How will pensions be managed?
Pensions will automatically be placed in a default age-related strategy. This means younger workers will be placed in a high-risk strategy and risk will reduce as they age, ending in a low-risk strategy as they approach retirement.
Workers will also have the choice of changing to a higher, medium, or lower risk strategy.
What will this mean for employers?
Employers are legally obliged to facilitate and pay into the pension scheme. This includes for workers who choose to opt-in to the scheme. Should an employer not fulfil their obligations, refuse to recognise a worker opting-in, or retaliate against a worker for opting-in the legislation outlines cases are to be taken to the WRC.
NAERSA will work out how much is paid which removes the administrative burden from employers who will only need to set up a direct debit.
Can a pension be inherited?
The pension is considered part of a worker’s estate. In the event the worst happens, their pension will be inherited as a lump sum. The money accrued is not transferable as a pension scheme.
For more information visit the Gov.ie auto-enrolment hub here.
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