Auto - Enrolment

What is Auto Enrolment:

Auto-enrolment (AE) is a pension scheme for employees where financial returns are paid out to participants on retirement, in addition to the State Pension.
Auto-enrolment is essential as not enough people have occupational or supplementary pension coverage to help maintain a standard of living in retirement more closely aligned to that enjoyed during a person’s working life.
Enrolments are to commence in September 2025.

Who Will be Auto-Enrolled:

An estimated 800,000 workers who :

This includes employees on probation, casual, seasonal or part-time contracts.

There will be a voluntary opt-in for employees outside age and income thresholds.

There will also be an opt out option after 6 months of auto enrolment, for 2 months only.

Those Currently Excluded:

How much will it cost?

Employer & employee contributions will start at 1.5% of gross pay from year 1-3

in year 4 they will increase to 3%
in year 7 they will increase to 4.5%
in year 10 they will increase to the maximum rate of 6%
contributions will be fixed, and employees or employers won’t be able to contribute less or more than the set rate i.e. No additional voluntary contributions allowable.

What does it mean for employers?

Employers will face minimal admin tasks as the National Automatic Enrolment Retirement Savings Authority (NAERSA) will identify eligible employees based on payroll data submitted to Revenue and handle the pension scheme administration.
Contributions calculated automatically by payroll software and submitted to Revenue.
Employers will have to ensure that they are acting in accordance with the legislation as fines and penalties will be imposed in the case of non-compliance.

Planning for auto enrolment – Key Considerations for employers

Budget for Auto enrolment .
Look at the current pension coverage in place as may now have 2 pensions running side by side .
Communicate re auto enrolment to the employees .