Publication
Auto-enrolment - frequently asked questions (FAQ's)
From Department of Social Protection
Published on
Last updated on
From Department of Social Protection
Published on
Last updated on
Auto-enrolment is a new retirement savings scheme which people will automatically be enrolled in once they meet certain requirements. It has been set up to provide a retirement plan for people without a work or private pension to save for retirement.
There are two main reasons:
Auto-enrolment is expected to begin near the end of 2024.
You must meet these conditions to be automatically enrolled:
Auto-enrolment will be run and managed by a new body set up by the Department of Social Protection.
The auto-enrolment scheme will be supervised by the Pensions Authority. It will have statutory independence and will be governed by a Board of Directors.
The Financial Services and Pensions Ombudsman services will also be available to participants.
Anyone who:
can opt-in to the scheme.
If you are eligible when the scheme launches, the new body will automatically enrol you. You do not need to take any action.
If you are not immediately eligible, you will be able to contact the new body and request to opt-in to the retirement savings scheme.
No, auto-enrolment is designed to increase people’s retirement savings. It will provide a new way for workers to save for their future. The purpose is to supplement the State Pension and not to replace it.
If you are no longer contributing to a work or personal pension, and you meet the other requirements, you will be automatically enrolled.
No, there are no plans to force employers to contribute to personal pensions.
If you are contributing to your personal pension through your payroll, you will not be eligible for the scheme.
We cannot advise if auto-enrolment or your current personal pension is better suited to your situation. The best option for you depends on your own circumstances.
Charges will be set and explained near the launch date. Employees will be able to view fees on their annual statement that will be accessible online.
No, opting out or suspending contributions will be possible in the following circumstances:
After two years if you still meet the eligibility criteria you will be re-enrolled. You can opt back in at any time before two years pass
Contributions that are not refunded (including the employer and State contributions) will stay in your savings pot and will continue to be invested. So even if you opt-out, you’ll still have a pot to drawdown/access at retirement.
The contributions are calculated on your gross salary, meaning your earnings before tax. The contributions will be gradually increased over the first 10 years.
| Year 1 to 3 | Year 4 to 6 | Year 7 to 9 | Year 10+ |
| 1.5% | 3% | 4.5% | 6% |
Your employer will match your contributions and the State will top-up €1 for every €3 you pay in. Contributions will be calculated up to a maximum gross salary of €80,000. This means that if you make more than this, you will only pay contributions on the first €80,000 you earn.
There are no plans currently to allow you to make additional contributions, but this may be an option in a few years' time.
No, you will not have to choose an investment path if you don’t want to.
The scheme will operate a default strategy, which will be operated on a ‘lifecycle’ basis. This means the risk level of your investment will be decreased as you get closer to retirement.
If you wish to choose an investment strategy, you will be able to choose from these options:
Your auto-Enrolment pot will not be guaranteed by the State. This is the same as any other pension or savings plan.
The State, through auto-enrolment, is helping you save for your retirement, but the funds do not belong to the State. Each individual participant will build up their own pot of money that belongs to them.
The State will not have any claim over that money and will not have any right in the future to use it for any purpose. It will always be your personal property, accessible on retirement.
We have also taken a number of steps to ensure that the money invested on your behalf stays as safe as possible, including:
Auto-enrolment is designed on a ‘pot follows member’ basis, meaning your retirement savings pot will follow you to your next job. This will happen automatically once you have been enrolled and will be managed through the new body that will run the system, so you won’t have to take any action.
If you have more than one job, your gross pay from all your jobs will be considered for the eligibility assessment of the scheme.
You will be enrolled in respect of any jobs where you do not have a supplementary or occupational pension contribution paid through payroll. Below are a few examples that should help you:
Mary is aged 25, has two jobs and doesn’t pay into a pension scheme through payroll in either employment. In job number 1, Mary earns €15,000, and in job number 2 Mary earns €8,000. Because Mary’s combined earnings are over €20,000 Mary will be automatically enrolled. She will contribute 1.5% of gross pay for each employment. This will be matched by both employers and topped up by the State.
John is aged 35 and has 3 jobs.
Because John earns more than €20,000 across all employments he will be enrolled. However, John will only pay contributions on the earnings from job number 1 and job number 2, but not job number 3 as he is already paying into a pension for this job. His contributions will be matched by the first two employers and topped up by the State.
If you stop working at any time before retirement, you will stay enrolled, but won’t make any contributions. Instead, your savings will continue to be invested for you. If and when you start to work again, you will begin making contributions, as long as you are not paying into a supplementary or occupational pension with your new job.
If you emigrate your savings pot will continue to be invested and you will have access to it at retirement age.
If you return to Ireland to work, you may be enrolled again if you meet the criteria at that time.
If you pass away before you draw down your savings, the pot will form part of your estate. Your savings and investments will be drawn down at the value they are at the point that the body running the scheme is notified of your passing. The savings will then be treated the same as any other savings or investments in your estate.
Currently, when you retire, you will receive a lump sum payment. A range of retirement products will be made available as the system matures.
No, early draw down will not be permitted except in the case of early retirement due to ill health.
No, however the State top-up is equivalent to 25% tax relief.
There are protections in the legislation to ensure that your employer must make contributions on your behalf. If they do not, they may be subject to fines and repayment with interest.
There will be an online portal where you will be able to see all details relating to your savings. The portal will be designed to be user friendly, showing your total contributions as well as how much your pot is worth.
Not a lot. We’re working to ensure that auto-enrolment is as easy for employers as possible. This means using existing processes that you’re familiar with, like payroll software. This means you’ll have to make sure that your payroll software is up to date come launch time and keep an eye out for notifications. There will be more information and guides available closer to go-live.
Any existing pension scheme will run in parallel to auto-enrolment. Any employees that have a record via payroll of either employee contributions and/or employer contributions will not be enrolled in the scheme.
The main cost is the contribution you will need to pay for each employee. The contribution rates are outlined in the table below, and will be calculated on the employee’s gross salary and paid from the net.
The rates are being phased in over the first 10 years from the launch of auto-enrolment. This has been done to give employers time to budget for auto-enrolment.
| Year 1 to 3 | Year 4 to 6 | Year 7 to 9 | Year 10+ |
| 1.5% | 3% | 4.5% | 6% |
Administration costs for employers will be minimal, as the body that will be set up to run the system will do all the work.
Yes. If you are paying corporation tax, you will be able to claim tax relief on the employer contribution. You will not be able to claim relief on the employee contribution.
No, there are no plans to compel employers to contribute to PRSAs.
Yes, employees who choose to opt-in will be treated the same as those who are automatically enrolled, and that means the employee, employer and State will contribute the set rates as outlined above.
No, once there is a pension contribution paid through payroll from an employee or employer, the employee will be deemed as having pension coverage already and won’t be enrolled.
In the future, when contributions for the auto-enrolment scheme increase, standards will be developed with the assistance of the Pensions Authority.
No, auto-enrolment has been designed to reduce administrative burden and cost to the employer. The cost will be much lower than if you were to administer a second pension scheme.
But if you are still concerned about this, then now is the time to talk to your employees about joining your existing scheme.
If your existing scheme operates waiting periods then it is likely that some employees will be automatically enrolled into auto-enrolment. However, they will be able to opt-out after 6 months and join your existing scheme if they choose to. As an employer, you may wish to consider the existing terms and conditions of your pension scheme.
The simple answer to this is that it depends on the PRSI class that you are contributing through as an owner director. If you pay PRSI as an employee and meet the eligibility criteria, then you will be enrolled. But if you are registered as self-employed then you will not be eligible.
No, the self-employed will not be included in the auto-enrolment scheme. This is because of the complexities of including self-employed people into a payroll software based scheme. This may be investigated further in the future. Self-employed people are encouraged to take steps to ensure they avail of current pension provision available to them and the tax relief that applies.
No, auto-enrolment will be administered by a central body so there is no need to engage the services of a broker.
A ‘pay reference period’ will be used to determine if an employee will likely reach the earnings threshold in a year. Using this simple assumption of earnings means that there is less of a wait time before an employee is able to benefit from auto-enrolment. For some employment, it will be clear on ‘Day 1’ that they meet the earnings criterion. For others, it might take up to 13 weeks to be sure.
As an employer you will need to make a separate return through payroll directly to the central body administering the scheme. Information on how this process will work will be made available to employers closer to go-live.
The calculations on contributions will be made through your existing payroll software.