The recent development regarding Ireland’s Automatic Enrolment (AE) Retirement Savings Scheme, called My Future Fund, and the Government's announcement of a postponement of the scheme, which was originally set to commence in September 2025, has led to a revised timeline, with implementation now expected in early 2026.

This delay provides additional time for businesses and employees to prepare for the transition, ensuring the system is introduced in a way that is efficient, accessible, and beneficial for all participants and Stakeholders are encouraged to use this additional time to assess their pension strategies, ensure compliance with upcoming regulations, and prepare for a smooth transition when the system is finally introduced.

Why the Delay

Minister for Social Protection, Dara Calleary, stated that the decision was made to:Align with the tax year, simplifying payroll and financial planning.Provide additional preparation time for employers and payroll providers, particularly small and micro businesses.Ensure a smooth rollout by integrating system updates into the annual payroll cycle.

What will the Scheme Involve?

Eligible employees (aged 23–60, earning over €20,000 annually and not already in a pension scheme) will be automatically enrolled.Initial contributions: Both employers and employees will contribute 1.5% of gross salary, increasing gradually every three years to reach 6% by 2035.The State will top up contributions by €1 for every €3 contributed by the employee, offering strong incentives for participation.

Employer Implications and Required Actions

Though implementation is delayed, AE remains imminent and mandatory. Employers should now take advantage of the grace period to ensure readiness across the following areas:

1. Review Current Pension Arrangements

Determine whether existing occupational schemes meet or exceed AE standards.
If coverage is already in place, confirm if your scheme qualifies as exempt from AE participation.
Identify employees who fall within the auto-enrolment criteria (age 23-60, earning €20,000+ annually, not currently in a pension plan)

2. Update Payroll and HR Systems

AE will require systems capable of identifying eligible employees, calculating contributions, and interfacing with the Central Processing Authority (CPA). Employers should engage with their payroll providers to ensure these changes can be accommodated.
Integration of AE rules (e.g., earnings thresholds, opt-out periods, re-enrolment) into existing payroll workflows will be essential.

3. Budget for Employer Contributions

While employer contributions start at a modest 1.5%, they will increase incrementally (to 6% by Year 10), representing a long-term cost commitment.

4. Staff Communication Planning

Clear employee communication will be vital. Misinformation may lead to opt-outs or confusion, affecting retention and employee relations.
Consider including AE awareness in induction materials and regular HR briefings.

Next Steps

The introduction of AE represents a paradigm shift in pension provision for Irish employers. We recommend using the postponement period to take proactive steps:

Conduct a Pension Audit: Understand your current pension arrangements in full detail. We can help benchmark your plan against AE minimums.
Model Contribution Scenarios: Forecast the medium and long-term cost implications of AE compliance.
Integrate Early: Prepare payroll and HR teams ahead of mandatory deadlines. Early testing with CPA APIs (once released) is advised.

How MBSL Can Support You

At MBSL, our team of tax and payroll specialists is on hand to assist you in:

Assessing exemption eligibility under AE,
Reviewing and upgrading payroll systems for compliance,
Liaising with pension providers and legal advisors,
Crafting a communication strategy for your workforce.

We’ll continue to monitor legislative updates and announcements, and we’ll issue a further bulletin once a definitive go-live date and operational guidelines are published. For tailored advice or to schedule a pension readiness review, please contact us directly.

If you would like to find out more on how AE will impact your business please contact, Elaine Ryan +353 1 2984366 or at Elaine.Ryan@mbsl.ie

We look forward to the opportunity to support your business in achieving its full potential.