Auto-Enrolment Retirement Savings Scheme 2026: What every employer should know and do before year-end

The Auto-Enrolment Retirement Savings Scheme is the new retirement savings scheme being introduced in Ireland in January 2026 pursuant to the Automatic Enrolment Retirement Savings System Act 2024 (the Act). It will apply to employees who do not already have a workplace or other qualifying pension arrangement.

 Key points for employers:

• Auto-enrolment retirement saving contributions will commence in January 2026

• Employers will be required to match members’ contributions, which will increase on a phased basis over the next 10 years up to a maximum of 6%, capped by an €80,000 earnings threshold

• Failure to pay the employee or employer contributions required under the scheme may result in penalties and possible prosecution

This article sets out what employers need to know and the steps they should take ahead of the January 2026 rollout.

Who will be automatically enrolled?[1]

Employees without existing supplementary pension coverage will be automatically enrolled if they:

• are aged between 23 and 60,

• earn €20,000 or more per year across all employments, and

• do not participate in any existing pension scheme.

Who can opt in?[2]

Employees who do not meet the automatic enrolment criteria may still voluntarily opt in, including:

• those under 23 or over 60, and

• those earning less than €20,000 per year.

Once an employee opts in, they will have the same rights and entitlements as automatically enrolled employees. This means employers must match their contributions in the same way.

Can employees opt-out?[3]

Employees who meet the automatic enrolment criteria cannot opt-out and will be enrolled in the scheme.

However, such employees will have the option to opt-out during the following windows:

• 6 months after enrolment, i.e. in months 7 and 8 only, or

• 6 months after a contribution rate change (discussed below), in months 7 and 8 only, or

• 6 months after a notice of re-enrolment is given, in months 7 and 8 only

  
  

If, 2 years after the employee has opted out, they still meet the eligibility criteria, they will be automatically re-enrolled in the scheme. 

Who is not eligible?[4]

The following will not be enrolled, and will not be eligible to opt in to the scheme:

• self-employed individuals; and

• employees who already either:

  • contribute to a pension scheme through their payroll or

  • their employer contributes to a pension scheme through their payroll for the benefit of the employee.

    
    

The National Automatic Enrolment Retirement Savings Authority will use Revenue payroll data to identify the employees that are eligible for auto-enrolment, so employers will not need to determine themselves whether their employees meet the eligibility criteria.

What are the auto-enrolment contribution rates?[5]

The following contribution rates for the scheme will operate on a phased basis over the first 10 years of the operation:

	Employee Contribution	Employer Contribution	State Contribution
Years 1 to 3	1.5%	1.5%	0.5%
Years 4 to 6	3%	3%	1%
Years 7 to 9	4.5%	4.5%	1.5%
Year 10+	6%	6%	2%

Employers should note:

• Contribution matching is mandatory - you must match their employees’ contributions.

• State top-up instead of tax relief- instead of tax relief on employee contributions, the State will provide a top-up contribution at a rate of €1 for every €3 paid in by the employee.

• Contribution rates are fixed - the contributions will be fixed at the set rate, and it will not be possible for you or your employees to pay more or less than this rate.

• Contributions are based on gross earnings - contributions will be calculated on the employee’s gross earnings, so anything included in the gross pay field of a payroll file will be assessable.

• Earnings cap - contributions will not be levied on any gross pay over €80,000.

• Tax treatment - employer contributions will be eligible for tax relief for the employer; however, they will not be subject to benefit-in-kind for the employee.

• Penalties for non-compliance - employers will be subject to penalties should they pressurise employees to opt-out or suspend their participation in the auto-enrolment scheme.

What do employers need to do in advance of January 2026

In advance of January 2026, if your employees are not exempt, you must:

• Set up a profile on the MyFutureFund Portal

The portal opens in December; therefore, you should complete this process before the end of December 2025)

• Set up a payment method

A variable direct debit is the preferred payment option for making employer contributions.

• Prepare payroll systems

You will need to ensure that your payroll software, when updated, can take instruction for enrolment, calculate and pay employee and employer contributions to The National Automatic Enrolment Retirement Savings Authority

• Run payroll as normal in January 2026

Contributions for eligible employees will begin automatically through the updated payroll process.

Contact Us

For more information on this or any other topic, please contact or any other member of the Power Law team.    

For further details on this or related matters, please reach out to Chelsey Heaney  or any member of the Power Law team, including our Employment team.

[1] Section 50 of the Act

[2] Section 53 of the Act

[3] Section 54 of the Act

[4] Section 51 of the Act

[5] Section 61 of the Act