In early 2026, the Irish pensions landscape will undergo one of its most significant shifts in decades.The introduction of auto-enrolment,
a system that will automatically enrol many employees into a pension scheme, marks a pivotal step in strengthening retirement savings across the country. For workers, employers and the wider system, the implications are profound.
Here’s a comprehensive look at what auto-enrolment means for Ireland, how it works, who benefits most, how employers should view it, and—importantly—what lessons we can draw from other countries in Europe.
What exactly is auto-enrolment and how will it work in Ireland?
Under the new system, referred to as My Future Fund, most employees who currently do not participate in a workplace pension or payroll-deducted pension will be automatically enrolled.
Key eligibility criteria:
Aged between 23 and 60.
Earning over €20,000 per year across all employments.
Not already in a qualifying occupational or personal pension scheme through payroll deduction.
How contributions stack up:
In the first phase (Years 1-3), total contributions will begin at ~3.5% of salary (1.5% employee + 1.5% employer + 0.5% state top-up).
Over a decade, contributions will phase upward until they reach around 6% employee + 6% employer + 2% state = ~14% of salary in later years.
Contributions are calculated up to a salary ceiling (€80,000 in some designs).
Admin & oversight:
A new independent body, the National Automatic Enrolment Retirement Savings Authority (NAERSA), will manage the scheme — enrolling workers, collecting contributions, investing funds, and ensuring portability (so your pot “follows” you across jobs).
Opt-out & inclusion:
Employees have an opt-out option after a minimum period, but will remain in the system by default if they don’t act.
Why this matters: The pension gap in Ireland
Ireland faces a significant retirement-savings challenge. Around one in three private-sector workers currently lack any supplementary pension beyond the State pension.
Given the State pension alone is unlikely to sustain many people’s lifestyle expectations in retirement, auto-enrolment aims to plug that gap by making saving automatic and collective.
By moving away from relying solely on individuals to opt-in (and many don’t), the system aims to raise coverage, contributions and ultimately, retirement outcomes. As one commentary put it: “Ireland is the last OECD country to introduce such a system.” WTW
Who will benefit the most?
Workers without any pension
Those aged 23-60 earning over €20,000, who currently are not enrolled in any pension scheme, stand to benefit the most. They’ll receive employer and State contributions they previously missed.
Younger & mid-career workers
Because contributions begin early and compound over time, younger workers (in their 20s or 30s) stand to gain the most from decades of consistent saving. For mid-career workers who haven’t saved, auto-enrolment offers a structured “catch-up” path.
Employers without existing pension schemes
If an employer currently offers no pension scheme, the auto-enrolment model gives them a default, regulated option that fulfils a retirement-savings role for employees, albeit with cost implications (see below).
The economy and society
By increasing private retirement savings participation, the reliance on State support in later life should decline, enhancing long-term sustainability of the pensions system and improving financial security for retirees.
Good (and challenging) news for employers
The positives:
Employers contribute, but the phased structure means contributions start modestly.
Having a national default scheme reduces the burden of setting up and managing many bespoke pension schemes (especially for smaller employers).
Contributions are tax-deductible.
The challenges:
Employers must decide: offer a qualifying occupational pension (to exempt employees from auto-enrolment) OR participate in the default scheme.
Many employers are unprepared: research shows ~79% of Irish organisations are either “completely or partially unprepared” for auto-enrolment.
Additional costs: employer contributions increase over time, meaning long-term budgeting is required.
Administration and payroll systems must be adapted.
What employers should do now:
Review current pension arrangements: do current schemes qualify and exclude employees from auto-enrolment?
Communicate with employees: explain how the scheme will work, opt-out rights etc.
Prepare payroll and compliance systems: ensure cut-offs, eligibility checks, contribution collection.
Budget for phased contribution increases over coming years.
Lessons from Europe: What works, what to watch
Auto-enrolment isn’t a novel idea internationally; countries like the UK, Lithuania, Denmark and Poland have already implemented versions of it.
UK: Introduced auto‐enrolment in 2012. Pension participation rose from ~40% to ~86%.
Key takeaway: Automatic sign-up works in boosting coverage.
Warning flags: Contribution rates for many workers remain low; many still save too little to achieve a comfortable retirement.
Lithuania, Poland, Denmark: Various mandatory or quasi-mandatory schemes with combinations of employee, employer and State contributions.
What Ireland should watch:
Contribution adequacy: Coverage alone isn’t enough—raising savings to meaningful levels is critical.
Scheme design and choice: Employees who already have good pensions may be defaulted into a “standard” product which may be inferior. Ireland’s dual structure (existing scheme vs auto) may create complexity.
Communication & awareness: Workers (and employers) must understand the scheme, their rights, costs and benefits. Research shows awareness gaps in Ireland.
The big picture: Why this could be transformative
The arrival of auto-enrolment in Ireland is more than a policy tweak—it may represent a generational change in how retirement is funded. For many workers who previously had no pension through work, the default enrolment, combined with employer and state contributions, offers a new baseline of savings.
Over decades, this could raise coverage dramatically, reduce future reliance on the State pension, and improve retirement outcomes.
However, the success of the scheme will hinge on three things:
Sufficient contribution levels over time;
Effective administration and employer compliance;
Intelligent communication to both employees and employers so the scheme is engaged with—not ignored or opted-out.
Final thoughts
If you’re a worker in Ireland aged 23-60 earning over €20,000 and you don’t yet have a pension via your employer, then from 1 January 2026, you’ll likely find yourself automatically enrolled in My Future Fund unless you already have a qualifying scheme.
For employers, this is the time to prepare—review existing pension arrangements, align systems, communicate with staff, and factor in evolving contributions.
Auto‐enrolment isn’t a panacea. It won’t instantly create millionaire retirement pots. But it does change the baseline: saving becomes automatic, employer and state contributions build alongside, and the inertia that often prevents pension saving is broken.
For Ireland, this could be the moment pensions are taken seriously for a broad swathe of the workforce who previously had little or nothing in place. The question now isn’t if the scheme will launch, but how well both employers and employees come on board—and how effectively contributions are maintained, invested, and communicated.
If all goes well, 2026 will mark the dawn of a new era in Irish retirement provision.
