Auto-Enrolment confirmed to begin September 30th 2025

Auto-Enrolment Update: Further Delays Confirmed

A recent report confirmed that a number of key milestones remain outstanding including the establishment and staffing of a state agency that will oversee the project as well as the appointment of asset management firms to invest the retirement savings. Although the legislation underpinning the scheme is now confirmed and the Government has appointed Tata Consultancy Services as its preferred partner to build and run the auto-enrolment system, there are no commitments on any timelines around when the scheme will be launched. The launch target of early 2025 has now been delayed until September 30th 2025.

FAQs Updated

The Department of Social Protection has nevertheless published an updated FAQ document to help both Employers and Employees to prepare for the implementation of the auto-enrolment scheme, whenever that should be.

Key FAQs include:

General Questions

Who will be automatically enrolled?

Employees who meet the following conditions will be automatically enrolled:

• aged between 23 and 60
• earn more than €20,000 per year
• not currently paying into a work or private pension through payroll.

Questions for Employees

If an Employee’s earnings fall below €20,000 a year, will the Employee stay in the scheme?

If an Employee has been enrolled and their earnings subsequently go below €20,000 per year, they will stay in the scheme.

Will auto-enrolment replace the State Pension?

No, auto-enrolment is designed to increase people’s retirement savings. It will provide a new way for workers to save for their future. The purpose is to supplement the State Pension and not to replace it.

Can Employees keep contributing to their personal pension and be eligible for auto-enrolment?

Any employment where an Employee is not contributing to a personal or occupational pension through payroll and meets the other eligibility criteria, the Employee will be automatically enrolled.

Any employment where an Employee is contributing to a personal or occupational pension through payroll, will not be eligible for the scheme for that employment.

What happens to an Employee’s savings if they do opt-out?

Contributions that are not refunded (including the Employer and State contributions) will stay in the Employee’s savings pot and will continue to be invested on their behalf.

Can Employees claim tax relief on contributions?

No, however the State top-up is equivalent to 25% tax relief.

Questions for Employers

Do small Organisations have to implement auto-enrolment?

All Organisations with Employees in Ireland, regardless of size or structure, will have to facilitate the auto-enrolment scheme for Employees who meet the eligibility criteria and for those who wish to opt in.

Employers who prevent their Employees from joining the scheme, or who force their Employees to opt out or suspend contributions, may be prosecuted, and will be subject to fines and penalties. Withheld or underpaid contributions will attract interest payments.

Who is considered an Employee for the purposes of auto-enrolment?

An Employee for the purposes of auto-enrolment is the same as an Employee for tax and PRSI purposes. It is a worker who works for and is paid by an Employer and is not self-employed.

Will Community Employment, Job Initiative, Rural Social Scheme or Tús participants be enrolled in Auto-enrolment?

Participants of Community Employment, Job Initiative, Rural Social Scheme or Tús schemes will not be eligible for the auto-enrolment scheme.

Will new Employees be auto-enrolled straight away?

There are no waiting periods for the auto-enrolment scheme. New Employees who have an earnings record with Revenue where they have earned €20,000 or more in a year will be automatically enrolled. For new Employees who have no previous earnings record or a gap between their previous and new employment, enrolment may take up to 13 weeks while it is established if they will likely meet the earnings threshold.

How will the Employee’s salary be assessed for eligibility?

Any income reported in the gross pay field on payroll will be assessed. For some employments, it will be clear on ‘Day 1’ that an Employee meets the minimum earnings criterion. For others, it might take up to 13 weeks to apply a ‘look back’ at an Employee’s earnings in a pay reference period.

What if Employers already have a pension scheme in place for their Employees?

Any existing pension scheme will run in parallel to auto-enrolment. Any Employees that have a record via payroll of either Employee contributions and/or Employer contributions will not be enrolled in the scheme.

Can Employers automatically enrol Employees in their existing company pension scheme?

The auto-enrolment legislation does not provide for Employers to automatically enrol their Employees into their existing pension scheme. That is a matter for Employers and trustees of their pension schemes. Essentially, it depends on the terms of the employment contract.

Will Employers still have to provide access to a PRSA?

The Automatic Enrolment Retirement Savings System Act 2024 Act does not affect existing legislation, so Employers will still have an obligation to offer access to a PRSA for Employees who wish to avail of it.

Do existing schemes need to meet standards to be exempt?

No, once there is a pension contribution paid through payroll from an Employee or Employer, the Employee will be deemed as having pension coverage already and will not be enrolled.

By the end of year six of the operation of the auto-enrolment scheme, at the latest, standards for the exemption of existing pension schemes will be developed with the assistance of the Pensions Authority.

How will contributions be paid?

Employers will pay Employee and Employer contributions directly to the National Automatic Enrolment Retirement Savings Authority. It is anticipated that different methods will be available, including variable direct debit. Employers will be able to set this up on an Employer portal. More information will be made available closer to the launch date.

Will there be additional Employer returns to be made by Employers or will all the pension deduction information be processed through existing Revenue PAYE returns?

Employers will need to make a separate return through payroll directly to the National Automatic Enrolment Retirement Savings Authority. Information on how this process will work will be made available to Employers closer to the go-live date.

The calculation of contributions will be made through existing payroll software.

Employer Preparation

The Government updates emphasise that the only Employer compliance step in preparing for auto-enrolment involves ensuring that payroll processes are ready in advance of the launch.

Organisations will nevertheless benefit from taking the following preparatory steps in anticipation of the scheme’s implementation:

• Employee Queries

Employees are likely to have questions and concerns. Employers should therefore consider how to communicate the upcoming changes to Employees and consider who is best positioned to deal with queries.

• Existing Pension Arrangements

Organisations with existing pension schemes need to decide how to handle Employees who are not participating in existing pension schemes. They will either need to be auto-enrolled in the State scheme or possibly required to join the company scheme though this would require Employee consent. A dual approach may be necessary.

• Employment Contracts

Pay and benefits clauses will need to be reviewed to ensure they reflect the position under auto-enrolment.

• Payroll Processes

Employers also need to work closely with their payroll provider or payroll department to ensure that the relevant processes, software updates and deductions are in place before the scheme launches.

• Impact on Labour Costs

Finally, Employers will need to consider the financial impact of making matched pension contributions. The long-term maximum contribution of 6% of earnings up to €80,000 could represent a substantial increase in labour costs and needs to be considered as part of budgeting procedures and ongoing financial management.