Key Contacts: Bláthnaid Evans – Partner | Cian Moriarty – Partner |
In January 2026, the new Automatic Enrolment Retirement Savings System, also known as MyFutureFund, took effect. In December 2025, the Minister for Social Protection, Dara Calleary, signed the Automatic Enrolment Retirement Savings System Regulations (Amendment) (Section 52) Regulations 2025 (the “Regulations”).
Purpose
The new Regulations introduces updated exemption standards for auto-enrolment under MyFutureFund. It aims to support long-term financial security for workers by requiring employers to review their employees’ pension arrangements, ensure compliance with the new standard and avoid unexpected costs or enrolments.
Key changes introduced by the Regulations
Employees aged 23 to 60, who earn more than €20,000 per year and are not in a qualifying pension scheme, will automatically be enrolled into MyFutureFund.
Before the Regulations, any PRSA contribution level exempted an employee from the MyFutureFund scheme. Now, an employer’s pension plan must meet minimum contribution standards for an employee to remain exempt. The required contributions are:
- employers to contribute at least 1.5% of an employee’s gross pay (or €1,200 per year, whichever is less); and
- total contributions must reach at least 3.5% of gross pay (or €2,800 per year, whichever is less).
Employer and state contributions are capped at a gross annual salary of €80,000.
Challenges facing employers
Most PRSAs or pension plans usually base contributions only on basic salary, though this can differ between employers. However, under the new Regulations, MyFutureFund calculates contributions using gross pay, which covers salary, bonuses, overtime, and commission. This difference presents a challenge for employers. If an employer is using MyFutureFund and has not factored in additional payments such as bonuses, overtime, or commission, the pensionable salary used for contributions may be much lower than the eligible gross pay. As a result, this may result in employers not meeting the new standards set by the Regulations. However, if an employer has their own pension scheme or uses a PRSA as an equivalent, the Regulations provide that the contributions can be based on basic salary only. As such, this distinction is an important difference between the MyFutureFund and other private schemes and is certainly a factor employers will need to consider.
The National Automatic Enrolment Retirement Savings Authority (“NAERSA”) oversees the system to help more workers save for retirement. According to the Department of Social Protection, employees will remain exempt while NAERSA reviews their situation, even if their pension plan does not meet the standards. NAERSA will review three months of payroll data to assess contribution sufficiency. If there is a shortfall or non-compliance, NAERSA will contact employers to help them correct it by increasing contributions or enrolling employees into MyFutureFund. While the focus is on supporting compliance, NAERSA may require backdated contributions with interest or impose penalties if employers do not engage.
Despite the new rule, several practical questions remain. It is unclear how often NAERSA will conduct compliance checks, when these checks will occur, and how bonuses and commissions will be treated. As commission, and bonuses differ across employers, the timing of a review could affect whether an employer appears compliant. It could also prove quite difficult for employers to calculate as the amount of these variable payments is rarely known at the commencement of each financial year.
Next steps for the employers
To prepare, employers should begin categorising their employees. Most importantly, identifying the employees with bonuses, overtime, or commission which will likely require the most attention, and who will be subject to MyFutureFund. Employers can carry out a standards assessment by reviewing each employee’s total earnings and comparing them to current pension contributions. This will help identify any shortfalls and highlight what changes may be needed.
Based on the assessment, employers may need to increase contribution rates, expand what counts as pensionable salary, restrict pension plan eligibility, or introduce a top-up mechanism to cover shortfalls. Available options will depend on employment contracts and the rules of each pension plan or PRSA.
For further information, please contact our Employment team via the details below.
