Last Minute Regulation on Auto Enrolment
A last minute regulation signed by the Minister for Social Protection in late December 2025 provides important clarification for employers ahead of the introduction of Ireland’s new auto enrolment pension system, My Future Fund.
The regulation addresses uncertainty that had existed in the absence of guidance on what level of employer pension provision would be sufficient to exclude an employee from auto enrolment.
Auto Enrolment and My Future Fund
From 1st January 2026, eligible employees who do not have a qualifying workplace pension will be automatically enrolled into My Future Fund. The scheme applies to workers aged 23 to 60 earning €20,000 or more per year who are not already members of a qualifying occupational pension arrangement.
At the introductory phase, total contributions under My Future Fund equate to 3.5% of gross pay, made up of employee, employer and State contributions. These rates will increase on a phased basis over time.
The Position Prior To This Regulation
In the lead up to the launch of auto enrolment, there was no clarity from government as to what minimum contribution level an employer pension scheme would need to meet in order to exempt employees from My Future Fund.
As a result, the general understanding and indeed advice from Pension Providers, was that the existence of an employer pension scheme would mean an employee would not be automatically enrolled, regardless of contribution level. Many employers acted in good faith on this basis.
The absence of clear statutory thresholds, however, meant that this position was open to interpretation.
The Clarification Now Provided
The new, last minute, regulation introduces minimum contribution standards for defined contribution occupational pension schemes that are intended to operate as an alternative to My Future Fund.
In practical terms, an employer pension scheme must now deliver contributions comparable to My Future Fund at the introductory phase in order to be treated as exempting an employee from auto enrolment. Schemes with lower contributions will not meet this threshold.
Under the regulation, defined contribution occupational pension schemes must deliver total contributions of at least 3.5% of an employee’s gross pay in order to be regarded as an alternative to My Future Fund. Of this total, a minimum employer contribution of 1.5 percent is required, with the balance made up of employee contributions.
Where an employer pension scheme does not meet these minimum contribution levels over the relevant assessment period, employees may still be required to be auto enrolled, or the employer pension arrangements may need to be adjusted accordingly.
Where an existing scheme does not meet the minimum standards, employees may still need to be auto enrolled, or the employer pension contributions adjusted accordingly.
What This Means For Employers
This update is not an indication that companies have done anything wrong. Rather, it reflects a late stage policy clarification designed to ensure consistency and protect employee outcomes across all sectors.
However, it does mean that employers can no longer rely solely on the existence of an occupational pension scheme. Contribution levels now matter, and pension arrangements should be reviewed to confirm whether they meet the qualifying criteria.
Companies with low contribution schemes, legacy arrangements or recently introduced pensions should take this opportunity to review their position.
Key Takeaways For Employers
Employers should not assume that all occupational pension schemes will exempt employees from auto enrolment. Minimum contribution standards now apply, and schemes must deliver a meaningful level of retirement saving comparable to My Future Fund.
It is also expected that further guidance and policy development will follow as the system beds in, including potential clarification around taxation treatment, contribution alignment and how different pension arrangements interact over time. Employers should therefore view compliance as an evolving process rather than a one-off exercise.
Prompt review and planning will help avoid last minute compliance issues when auto enrolment is implemented.
Auto enrolment represents a significant change for employers, particularly SMEs. If you need support reviewing your existing pension arrangements, understanding whether your scheme qualifies MSS The HR People can assist.
Contact us at info@mssthehrpeople.ie, Ph +353 1 887 0690, or visit www.mssthehrpeople.ie
