Automatic Enrolment Retirement Savings System

 29 March 2022 (Updated Aug 2023)

The Irish Government has announced the details of the Final Design principles for the Automatic Enrolment Retirement Savings System for Ireland. The new system is designed to simplify the pensions decision for workers and make it easier for employers to offer a workplace pension.

Auto enrollments payouts will be in addition to the State pension payment of about €13,000 p.a.

Under Auto Enrolment employees will have access to a workplace pension savings scheme which is co-funded by their employer and the State. A key feature of the system is that although participation is voluntary, so that people don’t have to participate, it operates on an ‘opt-out’ rather than an ‘opt-in’ basis.

In order to encourage workers to participate, those people who choose to remain in the system will have their pension savings matched on a one-for-one basis by the employer. The State will also provide a top-up of €1 for every €3 saved by the worker. This means that for every €3 saved by the employee, a further €4 will be invested by the employer (€3) and the State (€1) combined bringing a total contribution to the pension pot of €7.

  • all employees not already in an occupational pension scheme, aged between 23 and 60 and earning over €20,000 across all of their employments, will be automatically enrolled
  • with the system set up by 2023 for employee enrolments in 2024, [ Update :  In Aug 2023, the Government announced the commencement of auto enrolment is delayed to the second half of 2024) that the introduction of Auto Enrolment will be very gradually phased in over a decade, with both employer and employee contributions starting at 1.5%, and increasing every three years by 1.5% until they eventually reach 6% by Year 10 (2034). This steady phasing allows time for both employers and employees to adjust to the new system.
  • matching contributions will be made by employers and the State to those contributions made by employees up to a maximum of €80,000 of earnings.
  • the State will also top up contributions by €1 for every €3 saved by the employee, up to a maximum of €80,000 of earnings. This is in addition to the €3 that will also be contributed by the employer.
  • employees will have a range of four retirement savings funds to choose from
  • three funds will have differing risk/return profiles. In addition, a default fund based on what is known as a ‘life-style’/’life-cycle’ investment profile will be provided
  • people who do not express a preference for any fund will be enrolled into the default fund

More Details

Re delay to second half of 2024 -

Disclaimer :

Whilst every effort has been made to ensure the accuracy of matters covered by this article, no responsibility for loss or damage occasioned by any person acting, or refraining from acting, as a result of matters above. Professional advice should always be sought before acting on any interpretation of matters covered by this article.