From 1st January 2026, the Irish Government will implement the new Auto-Enrolment Retirement Savings Scheme – a pension saving scheme for employees who are not currently in a workplace pension scheme. Called My Future Fund (MFF), it is administered by the National Automatic Enrolment Retirement Savings Authority (NAERSA). The relevant act is the Automatic Enrolment Retirement Savings System Act 2024 (“AE Act”).
This mandatory change affects all employers with qualifying employees and will become part of all employers’ payroll responsibilities.
The process is still under development, but we are highlighting some of the main points you need to know now to ensure you have time to prepare. This article is aimed at employers and company directors. It is broken into sections many of which contain links to further information on our blog post.
It is an important change to your payroll process and understanding your obligations is important to avoid any unnecessary problems with non-compliance or issues which may arise with your employees.
The key actions employers need to take:
✔ Register with NAERSA before the end of 2025.
✔ Update payroll to support MFF.
✔ Communicate to staff.
WHO WILL BE AUTO-ENROLLED?
An employee will be automatically enrolled in MFF if they:
- Are aged 23–60.
- Earn over €20,000 annually (across all employments) (cap of €80,000 on relevant earnings).
- Pay PRSI Class A or J.
- Do not already contribute to a pension scheme via payroll (employee or employer contributions).
Note: Directors paying PRSI Class S or M or those already contributing via payroll are excluded.
It will involve fixed pension contributions for employees, which employers must match, and additional contributions from the Government.
- Employees will have an opt-out window between months 6-8 after enrolment, after re-enrolment or contribution rate change.
During this window they can opt out and receive a refund of their own contributions, but employer and Government contributions will remain in the fund.
If the opt-out window has passed, then contribution suspension is possible under certain conditions.
Fixed percentage contributions are outlined below:
This is based on fixed 1.5% employee and employer contributions (and 0.5% State contribution) in the first 3 years, increasing by 1.5% and 0.5% every 3 years until year 10 of the scheme.
| Year of the auto-enrolment scheme | Employee Contribution Rate | Employer pays | Government pays |
| 1 to 3 | 1.5% | 1.5% | 0.5% |
| 4 to 6 | 3% | 3% | 1% |
| 7 to 9 | 4.5% | 4.5% | 1.5% |
| 10 and after | 6% | 6% | 2% |
- 2026 payroll software packages will allow for auto-enrolment, contribution calculations, and submissions to NAERSA.
- If you process your own payroll, NAERSA will provide information to you automatically, and the whole process should be included in payroll software packages for 2026.
- Employer contributions are deductible for Corporation Tax purposes.
WHO CAN OPT-IN VOLUNTARILY?
Employees who:
- Are aged 18–22 or 61–66.
- Earn less than €20,000.
- Pay PRSI Class A or J.
PAYROLL AND OPERATIONAL REQUIREMENTS
- NAERSA will automatically identify eligible employees from Revenue payroll data.
- MFF deductions must be processed through payroll and remitted to NAERSA the day after payroll is run.
- Employers do not manage enrolment status. If an employee wishes to opt out or suspend contributions, they must contact NAERSA, not the employer.
- No broker or pension advisor is required — the system is centrally managed.
- Communication between NAERSA and an employer will work in a similar fashion to the Revenue RPN system.
KEY POINTS FOR EMPLOYERS TO REMEMBER
You as an employer will need to comply with instructions from NAERSA. You do not stop or amend MFF deductions based on an instruction from an employee. Employees need to contact NAERSA if they have an issue with their deductions – assuming it is not a processing error in the payroll process.
- If your existing pension scheme qualifies as a ‘qualifying pension arrangement’ under the AE Act, you may not need a new scheme however, you should check that your current scheme meets the future requirements as standards for exemption will be published before the end of year 6 of MFF’s operation.
- You do not need to engage a broker or pension advisor to manage MFF. NAERSA will administrate the scheme.
- You will need to register with NAERSA before the end of the year. The registration portal is not yet available so this will be a task for later this year but remember it must be completed before year end.
- From January 2026 you need to facilitate payroll MFF deductions and pay the monies deducted to NAERSA. Payment will be taken by NAERSA the day after your payroll is paid.
- There is no change to the current pension legislation. You are still required to offer a PRSA to employees who wish to avail of it. Other pension legislative obligations are also not changing.
- Employers who fail to comply with their obligations under the AE Act may be subject to penalties, fines, or other enforcement actions as set out in the legislation.
COMPANY DIRECTORS, SELF EMPLOYED AND SOLE TRADERS
Different rules apply to these various categories.
- A company director will not be auto-enrolled if they:
- Are paying a class S or M PRSI contribution.
or
- If they have a payroll pension contribution in place. The pension contribution can be an employee and/or employer contribution processed through the payroll process. It is therefore important you check your pension is setup correctly in your payroll software.
If you are not paying class S or M contributions and do not have a pension deduction via the payroll process you could be enrolled into MFF if you meet the eligibility criteria.
- If you are registered as self-employed you will be exempt from MFF.
- If you are a sole trader and have one or more employees on your payroll you may be eligible for auto-enrolment.
IMPACT ON CURRENT PENSION ARRANGEMENTS
If you already operate an occupational pension scheme and an employee is enrolled via payroll, they will not be auto-enrolled.
- Employees with PRSA contributions made through payroll are excluded from auto-enrolment.
- If no scheme is in place, MFF must be facilitated for eligible employees.
- Employer contributions to MFF will be tax deductible for Corporation Tax.
- The contribution standards in any occupational pension scheme you currently have will not be subject to auto-enrolment standards at the moment, but it has been indicated that this is likely to be reviewed between years 4 and 6 of the scheme.
- Where there is no occupational pension scheme currently in place, employers will have to comply with auto-enrolment terms but will not be obliged to make contributions to employees’ own PRSAs where these exist.
Auto-enrolment contributions above or below those outlined in the table above will not be allowed under the conditions of the scheme. This does not currently apply to occupational or other pension schemes.
COMPANY PENSION SCHEME VS AUTO-ENROLMENT
While MFF is well intentioned it does have several limitations for employees and employers. Our Xeinadin Financial Services colleagues believe that many employers would benefit from implementing a tailored company pension scheme ahead of the MFF roll out.
Outlined below are some of the key differences between a tailored company pension scheme and the MFF scheme.
| COMPANY PENSION SCHEME | AUTO-ENROLMENT MFF | |
| Start Date | Anytime – fully flexible | Scheduled for 2026 |
| Eligibility | Employer decides eligibility criteria | All employees aged between 23 – 80 and earning €20,000+ |
| Employer Contributions | Customisable ranging from 1% upwards | Starts at 1.5% and rises to 6% from year 10 |
| Tax Relief | Full tax relief on employee & employer contributions | No employee tax relief – government contribution of 0.5% initially instead |
| Investment Options | Broad range to align with risk appetite of employee | Limited to Default Investment Fund* |
| Scheme Flexibility | Full control of the providers’ structures | Centralised and standardised by the State |
| Portability | Members can transfer or retain benefits | MFF account follows employee between jobs |
| Opt-Out Options | Defined by the employer and the scheme rules | Limited opt-out windows allowed every few years |
| Attraction & Retention Tool | Strong benefit to attract and retain talent | Less impactful as it is compulsory and standardised |
*It is worth noting that employees will have very limited investment fund options in MFF – they will be auto-enrolled into a default investment fund based on age but can change the fund type to high, medium, or low risk.
Why Act Now?
- More time to implement a customised pension.
- Immediate value add for your team.
- Avoid future administrative burdens on the company.
- In a strong position ahead of the inflexible MFF scheme.
EMPLOYER CHECKLIST: ARE YOU READY?
- Register with NAERSA before the end of 2025 (portal not yet live).
- Ensure payroll software will support MFF deductions and submissions.
- Review employee PRSI classes and pension statuses.
- Communicate upcoming changes to staff before January 2026.
- Prepare payroll team for NAERSA compliance instructions (RPN-style updates).
LINKS
See below for further information about auto-enrolment from the Department of Employment Affairs & Social Protection.
DEASP information for employers
DEASP information for employees
NEED SUPPORT?
If you have any questions or concerns about My Future Fund, contact us today to check you are prepared.
