Auto-Enrolment Retirement Savings Scheme: FAQs

At a glance

• Employee eligibility.
• Employer obligations.
• Operation of the scheme.
• Penalties and sanctions. 

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The Auto-Enrolment Retirement Savings Scheme (AE Scheme) is a new state-run pension savings scheme introduced for certain employees who are not paying into a pension via payroll. The scheme is currently scheduled to come into effect on 1 January 2026. 

Employee eligibility

1.   Which employees will be automatically enrolled into the AE Scheme? 

Not all employees will be automatically enrolled into the AE Scheme. Employees will be automatically enrolled if they: 

• are between ages 23 and 60;
• earn EUR20,000 or more per year; and
• are not paying into a work or private pension through payroll.

Employees who do not meet criteria (a) or (b) but are not paying into a work or private pension through payroll, may choose to opt into the scheme. 

Once there is a pension contribution from the employer or the employee, paid through payroll, employees will not be enrolled in the AE Scheme.  

2.   Will the employee still be auto enrolled if the employer offers a more generous scheme? 

If the employer offers a more generous pension scheme, but the employee has yet to opt in to it, that employee will still be auto enrolled into the AE Scheme, provided they meet eligibility requirements and have not already opted out. 

Employer Obligations

1.   What do employers have to contribute?

The contribution rates for auto-enrolment will be phased in over the first 10 years of the operation of the scheme: 

• Employer contributions will start at 1.5% of gross pay.
• 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%.

2.   Does the employer have to inform employees that they have been auto enrolled? 

Yes, employers will have to inform their employees when they are first enrolled. 

3.   When must the contributions be paid?

Contributions must be paid at the same time as the employee is paid, and the contribution information must be provided by the new government body, the National Automatic Enrolment Retirement Savings Authority (NAERSA). 

4.   Does auto enrollment legislation stipulate minimum contribution rates for employees or employers in relation to private pension schemes? 

No.  The government recently announced it intends to imminently legislate for this. 

Operation of the Scheme

1.   How will auto-enrolment work?

The NAERSA will administer the auto-enrolment scheme, leaving minimum administrative work for the employer.  The NAERSA will operate an online portal for employees, to manage employee opt-outs, opt-ins, suspension of contributions and re-enrolment.

2.   How will the contributions be collected?

Once an employee has been identified as eligible for auto-enrolment, the NAERSA will send the employer an Automatic Enrolment Payroll Notification (AEPN) through payroll software. 

The AEPN will notify the employer of the contribution amounts the employer and the employee will need to pay as a percentage of gross earnings. The contributions will be visible on the employee's payslip. 

Penalties & Sanctions

1.   What happens if the employer does not comply with their contribution obligations under the scheme?

Failure to pay contributions, or deducting contributions from an employee's gross pay but failing to pay the corresponding contribution within the prescribed time, will lead to the employer having to pay the NAERSA the amount they failed to pay with interest. 

If an employer prevents employees from opting in to the AE Scheme, or forces employees to opt-out or suspend contributions, the employer may be subject to prosecution and will be subject to fines and penalties.  

For example, certain offences will on summary conviction be subject to a Class A fine or imprisonment for up to 6 months (or both). Other offences could attract a fine not exceeding EUR50,000 or imprisonment for a term not exceeding 3 years or both.

2.   Will non-compliance result in any reputational harm?

Yes, the NAERSA will publish a list of employers who have been convicted of non-compliance.