The Department of Social Protection has issued a warning after reports that some employers are attempting to sidestep Ireland’s new pension auto-enrolment system. According to the Department, certain employers are pressuring staff into joining alternative pension schemes that offer significantly lower contribution levels than the State’s upcoming “My Future Fund” system.
Auto-enrolment, launching on 1 January 2026, is expected to bring more than 800,000 workers into retirement saving for the first time. It will apply to employees aged 23 to 60 who earn over €20,000 and who are not already enrolled in an occupational pension scheme.
What the New “My Future Fund” Scheme Provides
Under the Auto-Enrolment Act, employer and employee contributions will begin at 1.5%, increasing every three years until they reach 6% by year ten. The State will also add a top-up of €1 for every €3 contributed by the employee.
Concerns arose when the Department was informed that some employers were attempting to satisfy their obligations by putting employees into schemes offering as little as 1% employer-only contributions. The Department emphasised that such contributions fall far short of the new legal minimum and are “unlikely to yield any material pension benefit.”
Trade unions have welcomed the Government’s move to strengthen regulations to prevent the use of token pension schemes that undermine the spirit of auto-enrolment.
Minister Emphasises Employee Rights and Scheme Protections
Minister for Social Protection Dara Calleary has encouraged all employees to familiarise themselves with the new system and compare any pension they are being offered to the My Future Fund. He highlighted that the fund is portable between jobs, fully owned by the employee, and designed to provide long-term financial security.
A 25-year-old earning €25,000, for example, could accumulate savings of €196,000 by age 66 before investment returns. Calleary also stressed that Ireland is the last OECD country to introduce auto-enrolment and that the new regime will provide long-overdue certainty for workers who currently rely solely on the State pension.
Why Getting Set Up Matters, and How We Can Help
With auto-enrolment now imminent, it is essential for employers to ensure they fully understand their obligations and are prepared for the administrative, payroll, and compliance requirements that come with the new system. Getting this right not only protects your organisation but also delivers significant benefits to employees — including long-term financial security, greater peace of mind, and a portable retirement fund that grows with every contribution from the employee, employer, and the State.
If you are unsure whether your business is compliant or need guidance on implementing auto-enrolment smoothly, reach out to us at GHR Consulting today.