How should I prepare for Auto-enrolment?

The long-awaited pension auto-enrolment scheme is finally due to be introduced this year. Pension auto-enrolment is set to revolutionise workplace pensions in Ireland, ensuring more employees have access to retirement savings. For employers, this change brings significant responsibilities. Preparing early can help businesses stay compliant and avoid potential penalties.

 

What is Pension Auto-enrolment?

Pension auto-enrolment is a government initiative designed to increase pension participation among employees.

Under this system, employers must automatically enrol eligible employees into a pension scheme and contribute a percentage of their earnings. The employee and the government will also contribute to the pension.

Employees retain the option to opt out, but participation is encouraged to enhance financial security in retirement.

 

How should employers prepare for auto-enrolment?

 

1. Stay Informed

The first enrolments under the auto-enrolment scheme begin on 30th September 2025.

More information about the process is expected in the coming months and employers should try to keep abreast of new developments.

 

2. Budget for Employer Contributions

Under auto-enrolment employers will need to contribute to the employee’s pension fund. This increase in your costs will need to be considered when budgeting for the year.

The employer will match employee contributions. For the first year, the employee and employer will pay 1.5% of the annual salary (salary capped at €80,000), increasing to 6% by year 10.

 

3. Check your Payroll Systems

You need to check with your payroll provider that they can handle auto-enrolment. The system should be able to take instruction for enrolment, calculate and pay employee and employer contributions to the Central Processing Authority.

If you are doing your own payroll inhouse now might be the time to consider outsourcing the payroll function, and we at TaxAssist Accountants, can assist in that regard.

 

5. Employee Engagement

Many employees may have not opted in for existing employer pension schemes. More often than not the reason for this lack of uptake, is that these schemes are genuinely not compulsory and are offered purely on a voluntary basis.

As such, in the absence of any opt in to existing workplace pension schemes, these employees will be brought into auto-enrolment if no further action is taken in that regard.

 

6. HR

Employers should review employment contracts and handbooks for future employees.

 

Why Act Now?

Early preparation for pension auto-enrolment will not only ensure compliance but also demonstrate your commitment to employees’ financial well-being. By taking these proactive steps, Irish employers can navigate this significant change with confidence and ease.

We will continue to update our Pension Auto-enrolment Knowledge Hub on our website as new information becomes available to us.

 

Last updated: 30th January 2025