Media Q&A: Where do I stand on fast approaching Auto-Enrolment

As a 35-year-old employee earning €50,000 per annum without access to a company pension, I’m set to be signed up to the Government’s auto-enrolment (AE) scheme when it’s launched next January. I’m unsure what action is required on my part around AE. Is it up to me to get in touch with Revenue and inform it that I’m one of those eligible for the scheme? Also, if I’d like to save more into my AE pension than the fixed contributions outlined so far, will I be able to do this? Finally, I’ve heard that my employer is considering offering a basic pension to us before AE is available – if this happens and I feel I would be better off under AE than the company pension, can I still join AE?

With an estimated 800,000 workers due to be signed up to the Auto-Enrolment (AE) scheme on 1 January 2026, I’m sure you’re asking the questions many others want to know the answer to also.

Employees aged between 23 and 60, earning over €20,000 per annum (across all employments) and not already contributing to an occupational pension will be automatically enrolled into AE. Based on your circumstances, you appear to be eligible for AE.

Importantly, if you are a higher rate taxpayer, you may benefit more from the tax relief available on private pensions such as Personal Retirement Savings Accounts (PRSA) or personal pensions, compared to the State top-up under AE. With a PRSA or personal pension, you receive tax relief at your marginal rate - currently 40% for higher rate taxpayers - on your contributions (subject to Revenue limits). This can make private pension options particularly attractive if you wish to contribute more than the fixed AE limits or maximise your tax advantages earlier in your retirement planning.

There is no need for you to inform Revenue or the Government that you qualify for AE. The National Automatic Enrolment Retirement Savings Authority (NAERSA), which will administer the AE scheme, will notify employers about employees who must be enrolled. Employers are then responsible for enrolling eligible employees and starting contributions. AE is a defined contribution pension scheme: employee contributions are matched by employers and topped up by the State at a rate of €1 for every €3 you pay in (effectively a 25% top-up). Contributions will be deducted alongside your salary and shown on your payslip.

However, AE does not allow flexibility in contribution rates: both employee and employer contributions are set as a percentage of earnings, rising from 1.5% to 6% over the first ten years. Neither employees nor employers can contribute more or less than these set percentages. Employer and State contributions are capped at €80,000 of annual salary. If you want to save more than the AE limits, you cannot do so within AE itself, but you can make additional voluntary contributions into a personal pension or PRSA, which, as mentioned, may offer greater tax relief if you are a higher rate taxpayer.

You also mentioned that your employer may introduce a basic company pension before AE is available. It is important to note that if your employer sets up any company pension scheme (even with minimal or no employer contributions), this may exempt both you and your employer from the AE scheme for as long as the company scheme is in place. Under current rules, the employer is not obliged to contribute to the scheme in order for this exemption to apply; simply having pension contributions paid through payroll - whether to a company pension or to a PRSA - can be sufficient. However, the minimum standards for employer pension schemes (to match AE’s benefits) will not come into effect until AE has been operating for seven years. Until then, the terms and contribution rates of employer schemes may vary widely, so it's crucial to compare what your employer offers against the AE scheme to ensure you are getting the best benefits for your retirement needs.

Given these complexities and the impact of tax relief on your retirement savings, it is strongly recommended that you seek independent financial advice from a Financial Broker before AE is rolled out, to ensure you choose the most suitable pension arrangement for your circumstances.

ENDS

This article was published in The Sunday Times on 16 November 2025.