Auto-enrolment: important update on new minimum contribution standards

The new Irish pensions auto-enrolment system, known as MyFutureFund, went live on 1 January 2026. However, new regulations concerning MyFutureFund were introduced in late December and these important changes took effect on 1 January 2026.

In this insight, we take a look at what the Automatic Enrolment Retirement Savings System Regulations (Amendment) (Section 52) Regulations 2025  (the “Regulations”) mean for employers and set out what steps employers can take now to ensure compliance.

What’s changed?

Prior to these Regulations, employees were to be exempt from MyFutureFund if any level of pension contribution (employee and / or employer) was being made to a defined contribution pension scheme or personal retirement savings account arrangement (we collectively refer to these arrangements below as “Employer Plans”).

These Regulations:

• introduce minimum contribution standards for Employer Plans (which align with contributions payable to MyFutureFund); and
• mean that eligible employees (ie, aged between 23 and 60 and with total earnings exceeding €20,000) will only be exempt from MyFutureFund if they are in an Employer Plan meeting those standards.

The Regulations could have significant implications for employers operating Employer Plans.  Employers will need to carefully review the terms of their existing Employer Plans and assess whether contributions being made in respect of any employees will meet these standards.

We can assist with this assessment and have developed tools to streamline this process and provide insights on changes required (if any) to address the standards.

Minimum contribution standards

To meet the new standards, annual employer and aggregate contributions being made to an Employer Plan must match or exceed the employer and aggregate contributions (including state contribution) which would be paid to MyFutureFund.  This means that in any year:

• employer contributions must be at least 1.5% of an employee’s gross pay, subject to a cap of €1,200; and
• aggregate contributions (employer and employee combined) must be at least 3.5% of gross pay, subject to a cap of €2,800.

These caps reflect that, under MyFutureFund, contributions are not generally payable on gross pay over €80,000.

Gross pay vs Employer Plan pensionable pay

As referenced above, contributions to MyFutureFund are calculated on gross pay (ie all emoluments an employee receives, including bonus, commission, overtime etc.).  By contrast, under most Employer Plans, contributions are typically based on basic salary only, and without any salary cap applied.  This makes direct comparisons between MyFutureFund and Employer Plans complicated, as it is necessary to consider:

• what an employee’s gross pay will be under MyFutureFund compared to pensionable pay under the Employer Plan; and
• the contribution rates applicable under MyFutureFund and the Employer Plan.

For example

Employee A has basic salary of €45,000 and has a contractual entitlement to receive an annual bonus of €10,000.  Under their Employer Plan, a matching contribution of 2% of basic salary applies (ie 4% in total).

Aggregate contributions to the Employer Plan will be €1,800 (4% of €45,000), but would be €1,925 under MyFutureFund (3.5% of €55,000).  Therefore, standards would not be met.

Assessment of compliance with standards

In the short term, employees receiving any contributions to Employer Plans will effectively continue to be treated as exempt from MyFutureFund.  It is not anticipated that automatic enrolment notifications will be issued in respect of an employee simply because contributions do not meet the standards.

Instead, a press release issued by the Department of Social Protection states that the National Automatic Enrolment Retirement Savings Authority (“NAERSA”) will be:

• monitoring compliance with the standards under Employer Plans by assessing what contributions are being made over a three month period (we assume this means that based on three months payroll data NAERSA will assess whether annualised contributions would meet the standards); and
• if NAERSA assesses that standards are not met, contacting employers to assist them achieve compliance (either through adjusting the Employer Plan contributions, or facilitating employees being auto-enrolled into MyFutureFund).

This press release goes on to state that NAERSA’s focus will be on ensuring compliance rather than imposing penalties. However, enforcement action (such as requiring payment of backdated contributions with interest and / or imposition of penalties) may be taken where an employer does not engage or take steps to achieve compliance.

How exactly NAERSA’s assessment process will work, and the timing and frequency of assessments, remains to be seen.  We would have some concerns that, depending on the point at which assessments are carried out, results could be distorted and result in Employer Plans being inadvertently assessed as meeting or failing the standards.  Given this, we recommend that employers should now assess their employees’ position against the standards, and consider any required changes, rather than waiting for NAERSA to contact them.

Next steps for employers

The first step we recommend is to assess your employees by categorising them between:

• employees who definitely meet the standards;
• employees who will definitely not meet the standards; and
• employees who may or may not meet the standards depending on the level of remuneration they receive which is “non-pensionable” under the Employer Plan.

For some employers this process will be straightforward, though for many outlier cases will be identified which require further attention.  In particular, issues are more likely to arise in respect of employees with higher proportions of variable pay (bonus, overtime, commission etc.) which is non-pensionable under their Employer Plan.

To assist clients understand the implications for their Employer Plan, we have developed a standards assessment tool.  This tool analyses an employee’s projected earnings (basic and variable) and current Employer Plan terms to:

• project whether the standards will be met; and
• where standards are not met, provide insights on the level of shortfall which could arise and what changes would be needed to meet the standards.

Based on this assessment employers can then consider possible further actions required.  At a high level, this could mean one or more of:

• adjusting contribution rates, and / or components of pensionable salary, under your Employer Plan;
• changing Employer Plan eligibility terms to restrict membership; or
• implementing formal arrangements on how a standards shortfall will be addressed if one arises (eg by way of top-up employer and / or employee contributions).

The feasibility, and implementation steps, for any such changes will depend on employees’ current employment terms and Employer Plan terms.

Contact Us

If you would like to arrange to discuss how the standards could impact on your existing pension arrangements, please contact partner and head of Pensions, Lorcan Keenan, or any member of our Employment, Pensions and Benefits Group.