The Department of Social Protection has issued a warning to employers attempting to bypass Ireland’s new pension auto-enrolment system by directing staff into less advantageous pension schemes. The scheme, called My Future Fund, is due to launch on 1 January 2026 and aims to help more than 800,000 workers start saving for retirement.
Under the scheme, all employees aged between 23 and 60 who earn over €20,000 and are not already part of an occupational pension will be automatically enrolled. Contributions will begin at 1.5% of salary for both employer and employee, rising by 1.5% every three years until reaching 6% by the tenth year. The State will add €1 for every €3 contributed by the employee.
In a letter to Owen Reidy, General Secretary of the Irish Congress of Trade Unions (ICTU), the Secretary General of the Department of Social Protection expressed concern that some employers are requiring staff to join alternative pension schemes with minimal contributions. “We understand that payments into these pension schemes consist solely of an employer contribution of about 1% of salary,” the letter stated. “Such a low contribution is less than 30% of the initial contributions under My Future Fund and under 10% of the contributions expected after ten years. It is essentially a nominal contribution that is unlikely to provide any meaningful pension benefit.”
Mr Reidy welcomed the government’s plan to introduce secondary legislation to safeguard the integrity of the auto-enrolment system. “New regulations will prevent token employer contributions from fulfilling legal requirements,” he said. He encouraged workers pressured to waive their pension rights or join inferior schemes to contact their trade union for guidance.
Minister for Social Protection Dara Calleary advised employees to familiarize themselves with the new scheme. Speaking on RTÉ’s Today with David McCullagh, he noted a small number of companies are urging staff to join pension schemes that require lower employer contributions, ahead of the My Future Fund rollout. “Employees without a workplace pension will be automatically enrolled in the My Future Fund from 1 January 2026,” he said.
Mr Calleary highlighted that the fund is portable between jobs and is owned by employees, not the government or employers. He explained that every €3 contributed by an employee becomes €7 with state support. He added that a 25-year-old earning €25,000 could accumulate a nest egg of €196,000 by age 66, excluding investment returns.
Ireland will be the last OECD country to introduce auto-enrolment. Currently, hundreds of thousands of workers lack a pension and would rely solely on the State pension in retirement. The scheme will be independently managed by NAERSA, and a portal opening on 1 December will allow employers to register staff, after which NAERSA will manage contributions and allow employees to track their own funds.
Mr Calleary described the scheme as a major step in providing certainty in retirement for Irish workers. “This is a very good thing for employees. It will give certainty in retirement, and that’s what it’s all about,” he said.
