Auto Enrolment Pension Ireland: 2025 Guide

Auto Enrolment is Ireland’s new mandatory pension savings scheme, set to launch on 30th September 2025. 

Eligible employees will be automatically enrolled, with contributions from employees, employers, and the government.

What does this mean for your business?

Who needs to be enrolled, and how much will you have to contribute?

What steps should you take to stay compliant?

We’ll break down everything you need to know so you can prepare for the Auto Enrolment pension in Ireland with confidence.

What Is the Auto Enrolment Pension Scheme in Ireland?

The Auto Enrolment pension scheme is a new retirement savings system introduced by Ireland’s Department of Social Protection. The scheme aims to improve pension coverage and ensure greater financial security for workers in retirement.

It’s also known as the Automatic Enrolment Retirement Savings System or My Future Fund.

In this new scheme, the employer and employee will contribute to the employee’s pension pot, with the government adding an extra 33% of the employee's contribution. 

You will be automatically enrolled into this pension scheme if you meet all these three conditions:

• You are between 23 and 60 years old

• You have an annual salary of €20,000 or more

• You don’t have access to an occupational pension scheme

The Irish government has also set up the National Automatic Enrolment Retirement Savings Authority, an independent body that will administer the Auto Enrolment (AE) scheme. 

Do you already have an occupational pension arrangement for your employees? 

If you offer an occupational pension plan to your employees and contribute to their pension pot, you’re not required to participate in the Auto Enrolment scheme. 

But your occupational scheme must cover all staff from their first day of employment (more about this in the section where we compare occupational and AE schemes).

Additionally, if your employees choose not to contribute to your occupational pension plan but you, as an employer, continue to make contributions on their behalf, those employees will be exempt from Auto Enrolment.        

We’ll discuss Auto Enrolment’s eligibility criteria and contributions in more detail once we understand why it’s needed in the first place. 

Why Is Auto Enrolment Pension Being Introduced in Ireland?

About 750,000 Irish workers don’t have access to an occupational pension scheme.

They rely heavily on their State Pension post-retirement, which may not be enough to sustain their living standards (check out Ireland’s Average Pension in 2025).

That’s where the Auto Enrolment scheme comes in.  

It will allow employees to save more for their retirement, ensuring they won’t have to rely solely on the State Pension anymore.

How Will Auto-Enrolment Work in Ireland?

Let’s look at the eligibility criteria, contributions, and other rules of the Auto-Enrolment scheme.

1. How Can Someone be Eligible for Auto-Enrolment in Ireland?

All eligible Irish employees not currently enrolled in an occupational pension will be automatically added to the Auto-Enrolment pension scheme.

To be eligible for automatic enrolment, the worker must be:

• 23 to 60 years old 

• Earning €20,000 or more per year

Employees not meeting the required age and salary criteria won’t be auto-enrolled in the scheme, but they can join it willingly — provided they don't already have an occupational pension scheme membership or aren’t contributing to one.

Additionally, employees who previously contributed to a pension but currently don’t will be auto-enrolled if they meet the above criteria.

If your employees are on probation or working casual or part-time, the National Automatic Enrolment Retirement Savings Authority will determine their eligibility for Auto-Enrolment.

2. What Are the Employee, Employer, and Government Contributions to Auto-Enrolment Pension?

In the AE retirement savings system, the government contributes to the employee’s pension pot in addition to employee and employer contributions. 

As an employer, you must match your employees’ contributions up to a specific limit (keep reading to find out this limit).

The AE pension scheme will follow a phased implementation. 

In phase 1, which will last from 2025 to 2027 (three years), the proposed yearly contributions to the retirement fund will be:

• Employer contributions: 1.5% of earnings

• Employee contributions: 1.5% of earnings

• Government’s contribution: 0.5% of earnings

• Total contribution (employer + employee + government): 3.5%

The contribution rates set for employees, employers, and the government will increase over the years as follows:

• Years 4 to 6 (2028 to 2030): Contributions will be 3% for employees and employers, with a 1% government top-up.

• Years 7 to 9 (2031 to 2033): Contributions will rise to 4.5% for employees and employers and a 1.5% government top-up.

• Year 10 and beyond (2034 and onwards): Contributions will increase to 6% for employees and employers, with a 2% government top-up.

Here’s an example: 

Suppose Saoirse, who got auto-enrolled in 2025, makes €20,000 annually and contributes 1.5% of her gross salary, i.e., €300, to her pension fund. 

Then, her employer must also contribute €300. The state will top this up by contributing 0.5% of her salary, i.e., €100, to her pension pot. 

So, a total of €700 will be added to Saoirse’s pension fund. 

But there are some limitations:

• Employer contributions and government top-ups are capped at an income threshold of €80,000. This means the government and employers only match the employee’s contribution up to a maximum of €80,000.

• Employees earning more than €80,000 can make higher contributions by setting up a separate pension scheme. However, the employer and the government won’t have to match their contributions.

• In the Auto Enrolment system, contribution levels fixed by the government can’t be changed. So, employees can’t contribute an amount less or more than the set percentage for each year.

• Employees also won't be able to make Additional Voluntary Contributions (AVCs) to their pension pots. Those who want to pay extra must set up a separate pension scheme to accommodate this.

What’s more?

Employee contributions will be deducted from their net income after income tax, pay-related social insurance (PRSI), and universal social charge (USC) have been deducted. 

Unlike traditional occupational pension schemes, the Auto Enrolment scheme doesn’t offer tax relief on pension contributions. In occupational schemes, this relief is typically applied at the employee's marginal tax rate.

But look:

Just like in an occupational pension scheme, employer contributions to Auto Enrolment pension are exempt from being treated as a taxable benefit. Simply put, this won't add to your employees' taxable income, making it a tax-smart way to enhance their retirement savings.

3. What Are the Opt-In/Out Rules for Ireland’s AE Pension Scheme?

The AE retirement saving system will operate on an ‘opt-out’ rather than an ‘opt-in’ basis to encourage employees to understand the benefits of retirement savings through a pension plan. 

What does this mean?

All eligible employees will automatically be enrolled in the pension scheme — and they can only opt out of the Auto Enrolment scheme after six months of joining.

After six months in the scheme, employees have the option to opt out of Auto Enrolment (in the 7th or 8th month) and get a refund of their contributions. They also have the option to suspend their contributions at any time; however, in this case, they won’t get a refund. 

But what about the employer and government top-ups?

The contributions paid by employers and the state will remain in the pension pot because employees can only opt out of the scheme or suspend their contributions for a limited time. They’ll be automatically re-enrolled after two years. 

Important: If employees want to opt out of the scheme again, they must repeat the entire process in two years time. 

4. Will the Employee’s Savings Be Secure?

Like in any other pension scheme, the government doesn’t guarantee the performance of an employee’s AE pension fund. 

This means the value of the employee’s pension pot may increase or drop depending on investment returns and inflation.

However, the Pensions Authority will regularly monitor the functioning of the AE scheme to ensure all rules are followed. The government will also collaborate with reputed investment management companies to provide regulated financial services to ensure fund safety. 

Next, let's check out some drawbacks of the new AE scheme.

What Are the Limitations of the Irish Auto-Enrolment Pension Scheme? 

Ireland’s Auto Enrolment pension scheme is designed to help employees retire comfortably. 

Although the AE scheme may boost the retirement income of employees earning less than €44,000 with the 33% state top-up, there are some drawbacks:

• Employees can’t make Additional Voluntary Contributions (AVCs) to their pension pot. 

• Re-enrollment of employees every two years might not suit everyone’s financial situation.

• Self-employed and unemployed individuals are excluded from the AE pension arrangement.

• Employees can only access their savings upon reaching the State Pension age (currently 66). 

• The withdrawal options are less flexible than private and occupational pension plans.

Now you must be wondering… 

Auto Enrolment vs. occupational pension — how do they compare?

Let’s find out.

How Does the Auto-Enrolment Scheme Compare to Occupational Pension Schemes in Ireland?

Here’s an overview of the differences between the two pension schemes:

• Occupational pensions operate on an “opt-in” basis. This means an employer can make contributions on behalf of their employees, and employees can choose not to contribute based on their financial situation (i.e., they may decide not to opt in). In contrast, the AE scheme works on an “opt-out” basis and automatically enrols all eligible employees.

• Employers offering occupational pension schemes often match the employee’s contribution, while some companies usually contribute between 1-5% or more. On the other hand, in the AE scheme, both employees and employers will initially contribute 1.5%.

• In occupational pensions, employees receive tax relief on their pension contributions. This relief is applied at the marginal tax rate — 40% for those earning above €44,000 and 20% for those earning less than €44,000. In contrast, the AE scheme offers a 33% government top-up instead of direct tax relief.

• For employees earning over €44,000, the tax relief from occupational pensions is generally more beneficial than the 33% top-up provided by the AE scheme. However, drawdown options may affect which of these is more beneficial for the employees in the long run.

• Occupational pension allows more flexibility on drawing down pension early, when compared to the AE scheme.

The bottom line?

Setting up an occupational pension scheme is a great way to help your employees save for retirement. 

As mentioned earlier, if you already have an occupational pension scheme that covers all employees from their date of joining your company and you pay into the scheme, you don’t have to participate in AE.

To ensure that, update your occupation pension rules to make it:

• Open to all employees from their date of hire OR

• Open to all employees from their date of hire who are over the age of 23 OR

• Open to all employees from their date of hire who are over the age of 23 with a salary of more than €20,000.

Keep reading to discover more reasons to offer occupational pensions. 

How Should Employers Auto-Enrol Employees in Ireland?

The rollout of the Auto Enrolment retirement saving scheme will ensure that employers don’t have to set up a pension scheme or invest with a pension provider.

However, this can increase a department's administrative burden as they’ll need to handle budgetary concerns.

Here’s a plan for employers to prepare:

• Facilitate payroll deductions and ensure their payroll process is compatible with the auto-enrolment contribution requirements. 

• Update employment contracts to ensure they're up to date with the pension provision for contributions and other legal requirements.

• Communicate with employees — advise them on how the scheme will work and explain how the employee, employer, and state contributions will be managed.

• Report to NAERSA — while calculations are done through existing payroll software, employers must submit a separate report directly to the central body overseeing the scheme. More details on this reporting process will be available closer to launch.

That’s a lot to handle, right? 

All these additional responsibilities could bog down your HR and finance teams. 

To keep things simple and avoid the extra responsibilities, we think you should explore all options available to you. 

Fortunately, Kota can help you with Irish occupational pensions. 

What’s Kota?

Kota is a digital retirement benefits platform that helps businesses easily set up compliant occupational pension schemes in Ireland. 

We partner with Irish Life to offer comprehensive and affordable pension plans for teams of all sizes. 

That’s not all; Kota also provides a centralised digital hub and other smart features to simplify benefits management.

Here’s how Kota can help you set up an occupational pension plan for your team:

• Easy Enrolment: With Kota, enrolling employees in an occupational pension scheme is a breeze. Just create an account, set up your benefits package and enrol your team. The platform also makes it easy to track your matching contributions to each employee’s pension plan.

• User-friendly Digital Benefits App: We’ve designed our benefits app to promote transparency and accessibility. Employers and employees can monitor benefits information anytime, anywhere, directly from their smartphones.

• Payroll Sync: Kota seamlessly connects to your existing HR and payroll systems, automating data flow and minimising administrative burden.

These are just some ways Kota streamlines employee pensions. For a deeper dive, check out our Retirement product. 

Book a free demo to see Kota in action! 

How Will Auto-Enrolment Affect Casual/Temporary/Zero-Hour Workers in Ireland?

All existing and new employees will be evaluated for pension Auto Enrolment systems eligibility and will be auto-enrolled if they fulfil the criteria. 

It doesn’t matter whether they are on probation, working casually, or part-time. 

If the National Automatic Enrolment Retirement Savings Authority determines an employee meets the eligibility criteria, contributions from employers, employees, and the state will begin on the first paycheck following enrollment.

But what about self-employed workers?

Due to the challenges of integrating them into a payroll-based system, self-employed people won't be part of the Auto-Enrolment scheme for now. However, this might be revisited later. 

If you're self-employed, you can explore other private pension options and take advantage of the available tax reliefs.

10 FAQs on Ireland’s Auto Enrolment Pension Scheme 

Here are ten common questions about the pensions Auto Enrolment scheme:

1. How Does the Auto Enrolment Scheme Compare Against Private Pensions in Ireland?

Employees in private pension plans, such as Personal Retirement Savings Accounts (PRSAs), get tax relief based on their income:

• Over €44,000: 40% tax relief 

• €44,000 or less: 20% tax relief 

Additionally, as employees age, the maximum percentage of their income that qualifies for tax relief also increases. This is 15% for employees under 30 and rises to 40% for employees over 60, with the maximum income eligible for relief being capped at €115,000. 

2. What Happens to State Pension Scheme If Employees Opt for Auto-Enrolment Pension?

The auto-enrolment retirement savings scheme won’t change or replace the State Pension system.

It’ll supplement the State Pension system, giving all eligible Irish employees access to pension-saving schemes. 

When implemented, the Auto Enrolment scheme will support more than 750,000 Irish workers who don't already have access to a pension scheme with extra retirement income.

3. What Happens If Employees Opt Out of the Auto-Enrolment Scheme After a Change in Contribution Rates?

The AE scheme's contribution rates will start low and gradually increase over the first 10 years.

So, if you opt out of the scheme after a rate increase (in months 7 or 8), you’ll get a refund based on the difference between your old and new contributions over the past six months. 

However, this option is only available during the first 10 years of the scheme when the rates are still gradually increasing.

4. How Will Contributions Be Invested Under Ireland’s Auto Enrolment Scheme?

Under the Auto Enrolment scheme, you won’t have to worry about choosing an investment strategy unless you want to (similar to an occupational pension scheme). 

Here’s why: 

The scheme offers a default 'lifecycle' strategy, where the risk levels are initially high but gradually decrease as you approach retirement. This ensures your investments become more conservative over time.

For those interested in tailoring their investment management approach, there are usually four fund options available:

• Conservative: Primarily focused on government bonds and cash equivalents.

• Moderate Risk: Includes government bonds, blue-chip equities, and stock exchange indices.

• Higher Risk: Targets equities and property for potentially greater returns.

• Default: Automatically adjusts based on a lifecycle approach, reducing risk as you near retirement.

5. Is There Any Fee or Charge Associated With the Irish AE Pension Scheme?

The Irish government has indicated that the annual investment management charge for the Auto Enrolment pension scheme will be kept low. 

However, the exact amount has not yet been decided. 

6. What Happens to Employees’ Auto Enrolment Savings if They Stop Working, Emigrate or Pass Away?

• If an employee stops working, they remain enrolled, but their contributions stop.

• Upon emigration, their savings remain invested and will be accessible at retirement.

• If they pass away without claiming their pension, their savings are incorporated into their estate, valued at notification, and distributed like other investments.

7. Can Employers Claim Tax Relief on Their AE Pension Contribution?

Employers can claim income tax relief on their contributions to the Auto Enrolment pension scheme against corporate tax, just like in an occupational pension scheme. 

This means the employer’s contributions to the scheme are reduced by 12.5%.

However, this does not apply to employee contributions.

8. What Tax Matters Related to the Irish AE Pension Scheme Remain Unclear?

There are many unanswered questions about how certain tax issues related to the Auto-Enrolment pension scheme in Ireland will be handled. 

These include:

• Accrued AE benefits: It's unclear if the benefits accumulated in the AE scheme will be considered when calculating tax benefits, like the Standard Capital Superannuation Benefit (SCSB) or the Increased Exemption for employees who leave their jobs.

• Lump sum payments: There’s no update on how lump sum payments taken from the AE scheme at retirement will be taxed.

• Non-resident individuals: The tax rules for non-residents participating in the AE scheme, especially those working in Ireland for foreign companies, are still uncertain.

9. When Can Employees Drawdown Their Pension Benefit?

Unlike an occupational pension scheme, where funds are accessible from 50, your employees must wait until they reach the State Pension age (66 in 2024) to access their funds. 

There is no provision for early drawdown. However, exceptions may be allowed for those retiring early due to ill health.

10. Do Other Countries Offer Auto Enrolment? 

Ireland is the only OECD country (Organization for Economic Cooperation and Development) that doesn’t offer an automatic enrolment retirement saving system yet. 

Other OECD countries that have introduced the automatic enrolment retirement savings system at a national level to help their employees save for retirement include: 

• The UK 

• New Zealand

• Poland

• Italy

• Turkey

• Lithuania

Still have more questions about Ireland’s Auto-Enrolment?

Download our in-depth guide for HR & Finance leaders. 

Offer & Manage Employee Pension Schemes Easily with Kota

The Auto Enrolment scheme in Ireland offers a retirement savings option for employees without occupational pension coverage. 

This scheme will run parallel to occupational pension schemes. If you already provide an occupational scheme, your employees won’t be auto-enrolled in the new scheme.

The fact is: 

Offering occupational pension plans can provide greater retirement benefits than the Auto Enrolment scheme. Due to the tax relief provision, it’s also a better option for employees in the higher tax bracket.

Want to offer your team a powerful occupational pension solution?

Join Kota! 

With Kota’s digital pensions, you can give your employees the financial security they deserve without the admin you despise.