Essential Guide to Auto-Enrolment in Ireland: What Employers and Employees Need to Know
The introduction of auto-enrolment in Ireland marks a major change in how retirement savings are managed. Expected to launch in September 2025, this scheme aims to provide universal access to pension savings, particularly for employees who do not currently have a workplace pension.
Auto-enrolment in Ireland was originally meant to roll out in September 2024 so you would forgiven for being confused about the scheme and if it is going to be rolled out. The government now say that by September 2025 auto-enrolment in Ireland will be implemented. Many employers and employees are still unclear on who will be affected, how much they will need to contribute, and what this means for businesses. With delays in the rollout and evolving government plans, understanding what’s coming and how to prepare is essential.
In this guide, we explain everything you need to know about Ireland’s auto-enrolment scheme, including its eligibility criteria, employer obligations, contribution rates, and how to prepare for the transition.
What is Auto-Enrolment and Why is it Being Introduced?
Auto-enrolment is a new pension scheme designed to increase retirement savings among Irish workers. The goal is to ensure that all employees have access to a pension, particularly those who are not already enrolled in a workplace scheme.
Why is Auto-Enrolment Needed?
Currently, over 750,000 workers in Ireland have no pension savings outside of the State Pension. The government has introduced this system to encourage long-term financial security for employees and reduce reliance on the State Pension in retirement.
Key Benefits of Auto-Enrolment:
✔ Ensures more employees save for retirement
✔ Provides employer and government contributions
✔ Creates a simple, centrally managed pension system
✔ Encourages financial security for future retirees
Who is Eligible for Auto-Enrolment in Ireland?
Auto-enrolment will apply to:
- ✅ Employees aged 23 to 60
✅ Earning €20,000 or more per year
✅ Who do not already have an occupational pension
If an employee falls into this category, they will be automatically enrolled into the scheme. However, they will have the option to opt out after six months if they choose.
What About Employees Who Already Have a Pension?
Workers who are already enrolled in a private or employer pension will not be automatically enrolled in the scheme. However, they can still join if they wish.
Employer Obligations: How Much Will Businesses Need to Contribute Auto-Enrolment in Ireland?
One of the biggest concerns for businesses is how much they will need to pay into the scheme.
Contribution Structure of Auto-Enrolment in Ireland
The contribution system will be introduced gradually over 10 years:
| Year | Employee Contribution | Employer Contribution | Government Top-Up | Total Pension Contribution |
|---|---|---|---|---|
| Years 1-3 | 1.5% of salary | 1.5% of salary | 0.5% of salary | 3.5% of salary |
| Years 4-6 | 3% of salary | 3% of salary | 1% of salary | 7% of salary |
| Years 7-9 | 4.5% of salary | 4.5% of salary | 1.5% of salary | 10.5% of salary |
| Year 10+ | 6% of salary | 6% of salary | 2% of salary | 14% of salary |
💡 Example: If an employee earns €30,000 per year, by Year 10, their total annual pension contribution will be €4,200 (€1,800 from the employee, €1,800 from the employer, and €600 from the government).
How Will Auto-Enrolment Work?
Full details on the Auto-Enrolment process have not been released yet but here is what we know: The system will be managed by a Central Processing Authority (CPA), meaning employers will not need to choose pension providers or investment funds.
Employees will have the option to:
🔹 Choose from four investment fund options
🔹 Stick with a default fund if they do not want to make a decision
🔹 Opt out after six months but will be re-enrolled after two years
What Does This Mean for Employers?
Key Responsibilities for Employers
✅ Identify eligible employees
✅ Ensure payroll systems can handle contributions
✅ Communicate with employees about their pension rights
✅ Budget for employer contributions
✅ Stay compliant with the scheme’s requirements
Will Auto-Enrolment Be Compulsory for Employers?
Yes, employers will be legally required to participate in auto-enrolment. They cannot opt out, and failure to comply could result in penalties.
However, the centralised system means that administrative burdens will be minimised, making the process smoother for businesses.
Can Employees Opt Out from Auto-Enrolment in Ireland?
Yes, but with limitations.
🔹 Employees must stay in the scheme for at least six months before opting out
🔹 Those who opt out will be re-enrolled every two years
🔹 Employees cannot opt out of employer contributions—if they stay in, both employer and government top-ups apply
This ensures that even those who initially opt out will have regular opportunities to reconsider.
How Should Employers Prepare for Auto-Enrolment?
With auto-enrolment expected in September 2025, employers should start preparing now.
5 Steps to Get Ready:
1️⃣ Understand the Scheme – Learn about contribution requirements and eligibility.
2️⃣ Review Payroll Systems – Ensure they can handle automatic deductions and contributions.
3️⃣ Budget for Employer Contributions – Factor in gradual increases in contribution rates.
4️⃣ Educate Employees – Provide clear communication about what auto-enrolment means for them.
5️⃣ Stay Updated – Follow government updates and work with HR experts to ensure compliance.
💡 Need expert guidance? ORC can help, call us today if you have any questions. We will also keep you updated of all changes and updates as they come out.
Final Thoughts: A Positive Change for Retirement Security
While auto-enrolment may seem like a big shift, it’s designed to increase retirement security for workers and provide long-term financial benefits.
For employees, it means better pension savings with extra contributions from employers and the government.
For employers, it means compliance obligations but also a more secure workforce in the long run.
Stay informed and prepared – ORC is here to support your business through this transition!
Do you have questions about auto-enrolment? Get in touch with ORC’s HR experts today.