Auto Enrolment Bill Approved by Cabinet

This article was written in April 2024. For more up-to-date information on Ireland’s auto enrolment journey, please check out this article published in June 2026.

The journey to an auto-enrolment pension scheme in Ireland has taken another step in the right direction. A draft of legislation for the new auto-enrolment pensions scheme was approved by Cabinet last week. However, while it’s been signed off by Cabinet, it still needs to be made law.

Once this bill becomes law, nearly 800,000 workers will need to be enrolled into a pension scheme.

The bill is due to start its journey through the Oireachtas after Easter (when the D¡il resumes on the 9th of April), and all going smoothly, Heather Humphreys is hopeful that the scheme could kick off as early as the 1st of January 2025. However, some experts are sceptical of this date, considering the amount of infrastructure (such as the new National Automatic Enrolment Retirement Savings Authority and finding investment companies) that still needs to be set up, along with multiple delays for the scheme in the past.

Here’s a quick recap of what we know about auto-enrolment so far.

What’s the reason for auto enrolment?

Data from the Central Statistics Office shows that only two thirds of eligible Irish workers are enrolled into a pension scheme, and when you take the public sector workers out of this, the percentage is only about one third.

The State pension is currently set at just over €250 a week, and unfortunately, as an aging population, this means there are many people whose income when they retire will be well below what is needed to maintain a quality standard of living.

Auto-enrolment is being brought in to rectify this, by making it mandatory for employers and the State to contribute towards employees’ pensions and improve the standard of living for retirees.

How much will we have to pay?

The amount employees, employers, and the State will be required to pay will depend on the employee’s salary. There are four different contribution rates to be paid that will increase gradually across 10 years.

How much will employees pay?

• From years 1-3 of being enrolled, employees will pay a contribution rate of 1.5%

• From years 4-6, employees will pay a rate of 3%

• From years 7-9, employees will pay a rate of 4.5%

• And after 10 years, employees will pay a rate of 6%

For example, if an employee earns €45,000 a year, they would contribute €675 a year. After their 10th year, they’d be contributing €2,700 a year.

How much will employers pay?

Employers will match the employees’ contribution rate, so the rates are the same as above.

How much will the State pay?

The State will make a 0.5% contribution rate, which is a third of the contribution rates that the employee and the employer pay. So, for every €3 put into the pension scheme by the employee, the State will contribute €1.

• From years 1-3 of the employee being enrolled, the State will pay a rate of 0.5%.

• From years 4-6, the State will pay a rate of 1%

• From years 6-7, they will pay 1.5%

• And after 10 years, they will pay a rate of 2%

Is there any cap on contributions?

Both employers’ and the State’s contributions are capped at an employees’ salary of €80,000. This means for the first three years, the employer’s cap is €1,200 (1.5%) and the government’s cap is €400 (0.5%). An employee can still contribute beyond the €80,000, but neither the employer or the government will match it.

What if I already have a pension scheme in place?

If your employees are already on a pension scheme, they won’t be enrolled into the new auto enrolment scheme (unless circumstances change and they become eligible).

Can my employees opt out of auto enrolment?

Yes, employees can opt out, but they will have to stay in the system for a mandatory period of six months. After the six months, they can pause or opt out of the auto-enrolment pension scheme. After two years (once they’re still eligible), they’ll be automatically re-enrolled into the scheme again.

Also, if an employee leaves your company or has just joined your team, the scheme works on a ‘pot-follows-the-member’ basis. So, the pot follows employees between different jobs.

How can I keep up to date on auto-enrolment changes?

Here at Bright, we’re working hard behind the scenes to provide you as much up-to-date information on new legislation, including auto-enrolment, that may affect your business. If you want to be updated on any new changes coming in regarding auto-enrolment, please let us know in the link below and we’ll keep you informed over the coming months.

This content may have been developed with the assistance of AI tools. Content is reviewed by a member of the Bright team before publication. Guidance on legislation can be obtained from your industry body.