The new auto-enrolment scheme, ‘My Future Fund’, is set to commence on the 30th September 2025. The scheme aims to support employees who are not currently making contributions into an occupational or other supplementary pension scheme to maintain their standard of living in retirement and reduce reliance on the state pension alone. Employees who are not already in a pension scheme, aged between 23 and 60 and who earn more than €20,000 per year will be automatically enrolled into the new system next year. Employees will have the option to opt out after six months, however after two years, those who still meet the eligibility criteria will be automatically re-enrolled.
The contribution rates for auto-enrolment will be phased in over the first 10 years of the scheme and will follow a 3:3:1 model i.e. for every €3 that an employee contributes, the employer matches that €3 and the State will top up by an additional €1. Employee and employer contributions will start at 1.5% of an employee’s gross earnings. In year 4, they will increase to 3%, in year 7 they will increase to 4.5% and in year 10 they will increase to the maximum rate of 6%. As the employee and employer contributions are matched equally and then topped up by the State, the total amount of contributions will amount to 14% of an employee’s gross earnings from year 10 onwards. It is important to note that contributions will be fixed at a set rate, and it will not be possible for an employee or employer to pay more or less than this rate. Contributions will also not be levied on any gross pay over €80,000.
Currently almost three out of every five Dublin Chamber members expect auto-enrolment to significantly impact their business’s operations and financial health. With the scheme’s roll out less than a year away, businesses must prepare strategically for the changes ahead. The Department of Social Protection, responsible for rolling out the scheme, have created a video playlist which explains how the scheme works, eligibility criteria, contribution rates and responsibilities for employers and employees. The video playlist can be accessed here.
For the latest news and additional updates on the impending auto-enrolment scheme, visit the Departments website here.
For any questions on auto-enrolment, contact autoenrolment@welfare.ie.