You probably already know the changes heading our way in 2024 with the introduction of Auto Enrolment in Ireland. The new pension investment scheme for employees means that employers will be required to match a set percentage of their employee's gross income contributions, which will be topped up by state funds.

With Auto Enrolment just around the corner, it's time to prep your business for change. Don't know where to start? – this blog is designed to help you answer some of the questions your employees will have about the new scheme. After all, you’re bound to have a few questions coming your way... so why not be prepared? 

1. How does Auto Enrolment work? 

All employees who fit the eligibility criteria and who have not yet been enrolled into a workplace pension will be automatically placed into the new scheme. This includes both current and new employees into the business.  

2. Am I eligible for Auto Enrolment? 

The Auto Enrolment scheme is open to employees who are between 23 and 60 years old and earning €20,000 or more per annum. But even if your employees don't meet this criteria, don't worry - they can still opt-in to the new system if they wish to do so!

Just a heads up- if your employees are already enrolled in an occupational pension scheme, they won't be automatically enrolled for this new scheme. Additionally, employees on probation or working part-time/casual will need to be assessed by the new Central Processing Authority to determine eligibility.  

3. What do I have to contribute to the scheme? 

With Auto Enrolment, contributions will start at 1.5% of gross income. Over the next decade, this amount will increase in phases, with an added 1.5% every three years until it reaches a total of 6%. Employers must match their employee's contributions, and the pension will also be topped up by the State, with a capped limit of €80,000 in earnings for employer and State contributions combined.

For every €3 that an employee contributes to the Auto Enrolment scheme, they'll receive an extra €4 in their pension pot! Here's the breakdown: for every €1 saved by the employee, €2.33 will be credited to their savings account- €1 from their personal contribution, €1 from their employer, and a bonus €0.33 from the State. These incentives are designed to encourage workers to stay in the scheme and make saving for retirement easier on everyone. 

4. Is there an option to opt out? 

Employees should be aware that they are able to opt-out of the Auto Enrolment scheme. 

All eligible employees will be automatically enrolled in the new scheme, but participation is completely optional. And if your employees are enrolled, they’ll have the option to opt-out or suspend their participation after six months. If they choose to opt out, they’ll be auto-enrolled again after two years, but don't fret – they can always opt-out again after another six months.

5. What happens if I move jobs?

If an employee moves jobs, there's no need to stress - the Auto Enrolment scheme is designed specifically for them and will travel with them wherever they go. So, there’s no need to worry about joining a new scheme every time their employers' change. If an employee has more than one employer, their pension savings will be combined into one convenient pot. Employees can easily manage their account. Simply login to the online portal run by the Central Processing Authority (CPA).  

6. When does this scheme begin?

Legislation and processes will be implemented from now with the launch of the scheme scheduled for the end of 2023. Contributions will begin from January 2024.  

A quick recap

With Auto Enrolment just around the corner, it's time to make sure you're fully prepared.  We understand how important it is to seamlessly integrate the new system with existing software. Our payroll software, BrightPay, already has full Auto Enrolment functionality in our UK software, so we already know what features and benefits you need for smooth and seamless process. You can catch a glimpse of how our payroll software will work with the scheme by booking a free one to one demo.