What is the Auto-Enrolment Pension Scheme?

Auto-enrolment is a new retirement savings system set to launch in Ireland in 2026. It’s designed to increase the number of private sector workers saving for retirement. Right now, only about 35% of private sector employees are actively contributing to a pension – the government wants to increase that to 70% or more.

Auto-enrolment works by automatically enrolling eligible employees into a pension scheme. That means, if you qualify and don’t already have a pension, you’ll be signed up without needing to do anything. Contributions will be deducted from your salary, and both your employer and the State will also pay into your pension.

This system is aimed at closing the pension gap and ensuring that more people are financially secure in retirement, especially those who may not have set up a pension themselves. If you’d like a clearer picture of how auto-enrolment could impact your financial plans, take a look at our guide on who stands to benefit and who might lose out under the new system.

When Does Auto-Enrolment Come into Effect for Irish Employees?

The Irish government plans to roll out auto-enrolment in early 2025. It will apply to employees who meet the following criteria:

• Aged between 23 and 60
• Earning €20,000 or more per year
• Not already enrolled in a workplace pension scheme.

If you meet these requirements, you’ll be automatically enrolled in the new system. The scheme will be rolled out in stages and fully phased in over a 10-year period, with contribution levels increasing gradually.

Here’s how the proposed contributions  :

• Year 1: 1.5% from the employee, 1.5% from the employer, and 0.5% from the State
• By Year 10: 6% employee, 6% employer, and 2% State contributions, totalling 14% of your gross salary

One important point: these contributions only apply to earnings up to €80,000 per year. Income beyond that won’t receive matching contributions, which can impact higher  .

Is Auto-Enrolment Better Than an Occupational Pension?

Auto-enrolment is a step in the right direction, but it’s not always the best option, especially when compared to a personalised occupational pension scheme.

Let’s look at the benefits of auto-enrolment:

• It’s automatic, no action needed to start saving
• It includes employer and State contributions
• It’s a good back-up option if you don’t already have a pension in place

However, there are several reasons why a traditional occupational pension may be a better fit for some people, particularly higher earners or those who want more flexibility.

Why an Occupational Pension Might Be Better:

• Greater Tax Relief: Auto-enrolment gives you a 33% State top-up instead of the usual income tax relief. If you’re paying tax at the higher rate (40%), you could lose out on significant savings compared to a traditional occupational pension.
• Investment Control: Auto-enrolment will have limited investment options. With an occupational pension, you can choose your provider and investment strategy, and switch if needed.
• Early Access: Under auto-enrolment, you can only access your pension at the standard retirement age. With an occupational pension, you may be able to draw down benefits as early as age 50, if you leave your job.
• Employee Engagement: Offering your own pension scheme lets you customise the experience for employees, a great way to attract and retain top talent.

If you’re a business owner or employer, setting up your own pension plan before auto-enrolment begins could save you money, offer better returns and give you more control. Explore your options in a business owner consultation with our expert advisors.

Can I Opt Out of Auto-Enrolment?

Yes, but not immediately.

Once you’re auto-enrolled, you’ll need to stay in the scheme for at least six months. After this lock-in period, you’ll have a short window of two months during which you can opt out. If you do, all contributions made by you, your employer and the State will be refunded.

It’s also important to note:

• Even if you opt out, you’ll be re-enrolled every two years if you’re still eligible.
• You can avoid being enrolled in the first place by having a qualifying pension scheme set up by the time auto-enrolment starts.

So, if you want more flexibility and control, the best route is to put your own pension arrangement in place before December 2025. That way, you’ll not only be exempt from auto-enrolment but will also have the ability to tailor your retirement planning to your needs.

Need help figuring out whether your current pension meets the criteria? Or wondering whether it makes sense to opt out after enrolment? Our team is here to guide you. You can book a no-obligation pension consultation to explore the best route for your financial future.

Final Thoughts

Auto-enrolment is a big shift in how Ireland handles retirement savings, and it’s coming soon. While the scheme will help more people start saving for retirement, it may not be the right fit for everyone.

Whether you’re a higher earner, someone seeking more investment choice or simply want earlier access to your money, an occupational pension can offer more flexibility and better tax advantages.

We strongly encourage you to review your pension setup before auto-enrolment goes live on 1st January 2026. By acting now, you can take control of your retirement planning and make the most of available benefits, both for yourself and, if you’re a business owner, your team.

The information is believed to be reliable but is not guaranteed. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.

Information as of the date of publication 08/08/2025