One of the biggest changes to retirement planning in Ireland is happening in January 2026, auto-enrolment but it’s officially known as My Future Fund.
Many people can feel overwhelmed by pensions, and they tend to be put off until later in life in many instances. Auto-enrolment has been developed to ease the burden for many people and is making saving for retirement the default rather than the exception. If you’re an employee and currently don’t have a pension, you will be automatically enrolled in this. If you’re an employer, you’ll have this as a responsibility going forward.
This article outlines the changes, and we hope it makes you feel more prepared and confident to navigate the future of pensions in Ireland.
What Is Auto-Enrolment?
Auto-enrolment is a new national pension savings system being introduced by the Irish government to help more people build retirement savings.
If you are eligible and not already contributing to a workplace pension through payroll, you will be automatically enrolled into My Future Fund. Contributions will be taken directly from your wages, with additional contributions made by your employer and the State.
Rather than relying solely on the State Pension, the system is designed to give workers a second layer of income in retirement, helping to improve long-term financial security across the country.
The scheme will be managed by a new authority, the National Automatic Enrolment Retirement Savings Authority (NAERSA), which will oversee enrolments, contributions, and investments.
In simple terms:
You save. Your employer adds to it. The State tops it up. Your pension grows.
Who will Be Enrolled?
You will be automatically enrolled if you meet all three of the following conditions:
- You are aged between 23 and 60
- You earn €20,000 or more per year (across one or more employments)
- You are not currently contributing to a pension through payroll
If you already have a workplace pension and are contributing through your employer’s payroll, you generally won’t be automatically enrolled.
What About Other Workers?
- Younger workers (18–22) or those earning below €20,000 will be able to opt in voluntarily if they wish.
- Self-employed individuals are not included in the auto-enrolment system. They will continue to use personal pension arrangements such as PRSAs or personal retirement plans.
This means that while auto-enrolment will cover a large portion of the workforce, it does not replace the need for individual pension planning in many situations.
How Do Contributions Work?
One of the most important aspects of auto-enrolment is how contributions are collected.
Your pension contributions will come from three sources:
- You (the employee)
- Your employer
- The State
The scheme is being phased in over 10 years, starting at a modest level and gradually increasing.
Initial Contribution Levels
When auto-enrolment begins in 2026:
- Employee: 1.5% of gross pay
- Employer: 1.5% of gross pay
- State: 0.5% top-up
This means that for every €3 you contribute, your employer adds €3, and the State adds €1. Over time, this becomes even more generous.
Final Contribution Levels
By year 10 of the scheme:
- Employee: 6%
- Employer: 6%
- State: 2%
By year 10, this will create a combined annual contribution of 14% of salary, a powerful level of long-term retirement saving for many workers.
There will also be an earnings cap (currently proposed at €80,000), meaning contributions apply up to that level of income.
What Happens If I Already Have a Pension?
If you already contribute to a workplace pension through payroll, your employer may be exempt from enrolling you into My Future Fund, provided their existing scheme meets certain standards.
However, many people currently save through personal pensions outside payroll, such as PRSAs arranged privately. In some cases, individuals in this situation may still be auto enrolled unless their employer offers a qualifying workplace scheme.
This is why it’s important not to assume you are automatically excluded. Reviewing your current pension structure will help avoid confusion.
Can You opt Out?
Yes, but not immediately.
Auto-enrolment works on an opt-out basis, rather than opt-in. This is intentional. International experience shows that people are far more likely to save when the default option is “in”.
Here’s how it works:
- You will be enrolled automatically if eligible.
- After six months, you may choose to opt out.
- If you opt out, your own contributions will be refunded.
- If you remain eligible, you will be re-enrolled after two years.
You will also have the opportunity to opt out again following any future increases in contribution rates.
The design encourages long-term participation while still giving individuals flexibility.
Where Is Your Money Invested?
Accounts will be managed centrally by NAERSA, with a range of investment funds available. There will be a default fund option for those who prefer not to make investment choices themselves, as well as alternative funds for those who want more control.
Your pension will be portable, meaning it follows you when you change jobs. This avoids the issue of having multiple small pension pots spread across different employers.
You’ll also have access to an online portal where you can:
- Track your contributions
- View your investment performance
- Update personal details
- Make certain fund choices
What Employers Need to Know
For employers, auto-enrolment brings new responsibilities.
If you employ staff who meet the eligibility criteria, you will be required to:
- Register with the My Future Fund system
- Identify eligible employees
- Deduct employee contributions through payroll
- Make matching employer contributions
- Submit payments on time
- Keep records and comply with regulations
There will be penalties for non-compliance, so preparation is essential.
If You Already Offer a Pension
Even if you already operate a workplace pension scheme, you may still need to review:
- Whether all employees are covered
- Whether contribution levels meet required standards
- How payroll systems align with new reporting requirements
Some employers may choose to continue with their existing scheme, while others may decide that My Future Fund offers a simpler solution. Each business will need to assess what works best for them.
What Auto-Enrolment Means for You
For Employees
If you’ve never had a pension before, this is a major opportunity.
Instead of trying to set something up yourself, saving will happen automatically, with valuable contributions from both your employer and the State. Over a working lifetime, this can make a significant difference to your retirement income.
That said, auto-enrolment may not be enough on its own to fully support the lifestyle you want in retirement. Many people will still benefit from:
- Making additional voluntary contributions
- Keeping personal pension arrangements alongside auto-enrolment
- Reviewing investment choices as their career progresses
For Self-Employed Individuals
Auto-enrolment does not apply to the self-employed. This means personal pension planning remains essential.
If you are self-employed, this may be a good time to review your pension arrangements and ensure you are taking full advantage of tax-efficient retirement savings options.
For Employers
Auto-enrolment is not just a compliance exercise. It is also:
- A way to support employee wellbeing
- A valuable retention and recruitment benefit
- An opportunity to demonstrate long-term commitment to your team
Clear communication with staff will be key. Many employees will have questions, and employers who provide guidance will build trust.
How to Prepare Now
If You’re an Employee
- Check your current pension status: Are you contributing through payroll or privately?
- Understand the impact on your take-home pay: Contributions will reduce net income slightly, but with employer and State support, the long-term value is significant.
- Review your long-term goals: Auto-enrolment is a starting point, not necessarily the final destination for your retirement planning.
If You’re an Employer
- Review your payroll systems: Ensure they can support the required deductions and reporting.
- Assess your current pension offering: Is it still fit for purpose under the new rules?
- Plan employee communication: Clear, early messaging will prevent confusion and concern.
- Seek advice: Understanding your options now can help you make cost-effective decisions later.
A Positive Step for Ireland’s Retirement Future
Auto-enrolment represents a major shift in how Ireland approaches retirement saving. By making pensions automatic, shared, and supported by the State, it aims to create a more secure future for millions of workers.
For individuals, it removes many of the barriers that have traditionally delayed pension saving.
For employers, it introduces new responsibilities but also meaningful benefits.
For the country, it helps reduce reliance on the State Pension alone.
The key is understanding how the system works, and how it fits into your wider financial picture.
At Prisma, we believe that good financial planning isn’t about complexity. It’s about clarity, confidence, and making sure your money is working as hard as you do, now and in the years ahead.
If you’d like help understanding how auto-enrolment will affect you or your business, or how it fits into your existing pension plans, we’re here to guide you.