Auto-enrolment.
Create your own Single Employee Experience.
With Auto-Enrolment (AE) legislation due to commence on 30 September 2025, your immediate priority is to ensure your business operates one robust pension solution for all of your employees.
When Auto-Enrolment is enforced, employers without an existing employee pension plan, will be facing a mandatory pension spend for the first time and will be required to make pension contributions in accordance with AE regulation. Tax incentives will differ between the government run system and the existing pension scheme system.
By acting now, you can establish a pension arrangement suited to your unique organisational needs, one that will allow you to create the single employee experience you want.
An overview of Auto-Enrolment.
Auto-Enrolment is a new retirement savings system for employees, proposed to come into effect in just a few months. Its aim is to make the decision to save for a pension easier for both employees and employers.
People will automatically be enrolled if they:
Do not have a pension scheme.
Earn more than €20,000 per year.
Are aged between 23 and 60 years.
*People under 23 years and over 60 years may opt to be included
With regards to the income threshold, those earning less than €5,000 annually are not eligible to participate in the AE Scheme, while those earning between €5,000 and €20,000 can opt-in voluntarily but will not be automatically enrolled.
Auto-Enrolment scheme contributions.
The contribution rates to the AE Scheme will include employee contributions, a matching employer contribution and a Government top-up equal to 1/3rd of the employee contribution. Contributions will increase every 3 years over the first 10 years of the scheme as seen the table below.
| Year | ER Contri-bution | EE Contri-bution | Govern-ment Top-Up | Total Contri-bution |
|---|---|---|---|---|
| 1-3 | 1.5% | 1.5% | 0.5% | 3.5% |
| 4-6 | 3.0% | 3.0% | 1.0% | 7.0% |
| 7-9 | 4.5% | 4.5% | 1.5% | 10.5% |
| 10+ | 6.0% | 6.0% | 2.0% | 14.0% |
A key element of the AE Scheme is that these contributions are to be based on an employee’s total earnings including any fluctuating elements of pay that are taxable, for example, anything subject to Benefit In Kind (BIK) up to a maximum of €80,000 per annum.
The AE Scheme will work on the principle that all eligible employees will be included but they can at certain points opt out, pause or suspend their contributions after 6 months in the scheme. Where an employee opts out they will be enrolled back into the scheme after 2 years.
As the AE Scheme has yet to commence, it remains to be seen how onerous this will be for you as an employer or what impact it will have on your payroll to administer.
Why you need to act now.
Once your employees are auto-enrolled you are locked in to the mandatory contribution rates. By setting up your own scheme now, you maintain control over the costs associated with contributions.
Your employees will need to be part of a pension solution in advance of the start date of Auto-Enrolment (30 September 2025) as the National Automatic Enrolment Retirement Savings Authority (NAERSA) will:
- Look back over an employee’s payslips 13 weeks prior to the start date
- Ascertain if they are eligible to be included in Auto-Enrolment (the €5,000 rule)
Get ahead of the deadline and ensure you’re fully prepared with our free Auto-Enrolment guide
Benefits of a private pension scheme for all.
Control over costs
A private pension scheme allows you to set your own contribution rates for all staff, providing flexibility to design a plan that fits your company’s financial situation and your employees’ needs.
Staff acquisition.
A private pension scheme can help you stand out to those in the job market, attracting a higher level of talent. AE reduces the differentiation between companies when comparing solely on pension offerings. It may require you to offer higher pension contributions or other additional perks.
Retention strategy
Many employees view a private scheme with favourable terms as a significant benefit, feeling more supported by their employer. This leads to increased loyalty, job satisfaction, and retention.
Future hires
AE will have a serious impact on Irish employers when planning future hires. Mandatory pension contributions will have to be calculated and will increase costs while also adding to the administrative burden and impacting budgeting. Having a private pension plan in place provides flexibility in structuring contributions, ensuring cost control while enhancing the overall compensation package.
Control over costs
A private pension scheme allows you to set your own contribution rates for all staff, providing flexibility to design a plan that fits your company’s financial situation and your employees’ needs.
Staff acquisition.
A private pension scheme can help you stand out to those in the job market, attracting a higher level of talent. AE reduces the differentiation between companies when comparing solely on pension offerings. It may require you to offer higher pension contributions or other additional perks.
Retention strategy
Many employees view a private scheme with favourable terms as a significant benefit, feeling more supported by their employer. This leads to increased loyalty, job satisfaction, and retention.
Future hires
AE will have a serious impact on Irish employers when planning future hires. Mandatory pension contributions will have to be calculated and will increase costs while also adding to the administrative burden and impacting budgeting. Having a private pension plan in place provides flexibility in structuring contributions, ensuring cost control while enhancing the overall compensation package.
The evolution of Irish pensions.
Join Fionán discussing the future of Irish pensions with ‘Auto Enrolment’ expected to launch on 30 September 2025. Employers face a critical decision: contribute or design a custom pension solution for employee retention.
Explore more Employee Retirement Solutions.
Master Trust
Discover the ultimate solution for managing your employees' retirement savings effortlessly through a Master Trust Pension solution. Offering this pension solution demonstrates your commitment to employee financial wellness and to attract top talent. Additionally, Master Trusts simplify administration, offer tax benefits, and empower your workforce to take control of their retirement planning.
Personal Retirement Savings Accounts (PRSAs)
Currently, the only legal obligation on you is to offer your employees access to a Pension Solution. As Ireland's simplest pension option, PRSAs meet your legal requirements effortlessly. With recent legislative updates, PRSAs now offer enticing tax benefits and investment diversity, ideal for ambitious business owners and senior professionals planning their retirement journey.
Create a Single Employee Experience
To get practical advice on the Auto-Enrolment Scheme and it’s implications for your business, contact us today
