Auto-Enrolment in Ireland: What Employees and Employers Need to Know
One of the biggest changes to how people in Ireland save for retirement is here – and it’s called MyFuture Fund, the Government’s new Auto-Enrolment pension system.
The goal is simple: to help more workers build their pension savings automatically.
If you’re an employee in Ireland, you will be automatically enrolled in MyFuture Fund if:
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You are aged between 23 and 60
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You are not currently part of a pension plan
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You earn €20,000 or more per year (this includes combined earnings if working multiple part-time jobs)
This means you don’t have to take any action to start saving – contributions will begin automatically through payroll. But as with any financial system, it’s important to understand both the benefits and the limitations.
How Auto-Enrolment Contributions Work
Under Auto-Enrolment, contributions will gradually increase over time from both employees, employers, and the government.
| Year of Scheme | Employee Pays | Employer Pays | Government Pays |
|---|---|---|---|
| Years 1–3 | 1.5% | 1.5% | 0.5% |
| Years 4–6 | 3% | 3% | 1% |
| Years 7–9 | 4.5% | 4.5% | 1.5% |
| Year 10 onwards | 6% | 6% | 2% |
By Year 10, a total of 14% of your salary will go into your pension each year – 6% from you, 6% from your employer, and 2% from the State.
Key Considerations and Limitations
While MyFuture Fund is a positive step toward greater retirement security, there are several important points to keep in mind:
1. Low contribution rates at the start
The initial contribution rates are quite small. This may not be enough to build a comfortable retirement fund if you’re joining later in your career. Depending on your age or retirement goals, you may need to contribute more independently or top up through another pension.
2. No personal advice or planner
There will be one central communication hub for all MyFuture Fund members – but participants will have to seek their own financial advice. The scheme won’t include access to a dedicated financial advisor or planner for tailored guidance.
3. Reduced tax relief for higher earners
Currently, higher-rate taxpayers (40%) can claim full tax relief on pension contributions. Under MyFuture Fund, a flat 25% relief rate applies.
That’s better than standard-rate relief (20%), but worse for those on the higher rate (40%). So while it’s a good deal for many, higher earners could lose some tax efficiency compared to PRSAs or occupational pensions.
What Employers Need to Do
Employers will also have obligations under the MyFuture Fund system, especially around how it interacts with existing company pension schemes.
For example, if a new employee joins your business on 1 November 2025 and is due to join your company’s group pension scheme after six months, they will be automatically enrolled into MyFuture Fund on 1 January 2026. Upon gaining permanency, this could create unnecessary overlap and extra administration.
Our recommendation:
Employers should consider reviewing and updating employment contracts now to allow new employees to join their company pension scheme from day one, with a two-year vesting period. This avoids confusion and keeps pension planning simple for everyone.
Other Key Points for Employers
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- Employers will not receive refunds on contributions made under Auto-Enrolment if an employee opts out, unlike traditional company pension schemes where refunds might apply.
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- Maintaining your own company pension scheme can strengthen staff retention, as it’s seen as a valuable employee benefit.
Final Thoughts
Auto-Enrolment will help more workers save for retirement, but it’s not a one-size-fits-all solution. The contribution levels and lack of advice mean it may not replace the value of a well-structured personal pension or company pension scheme.
If you’re unsure how Auto-Enrolment will affect you or your employees, our team at Prosperous can help you plan ahead and make informed decisions that align with your long-term goals.
To learn more about Auto-Enrollment and MyFuture Fund: Gov.ie
Dream. Plan. Enjoy.