Pension auto-enrolment Ireland: implementation update

Article updated 7th October 2024

After a significant period of consultation and rescheduling, pension auto-enrolment in Ireland is now set to launch on 30^th September 2025. Get up to date on the latest developments on this journey.

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Note – this article has been updated to reflect the latest developments and timelines for implementation.

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The concept of a mandatory savings scheme for certain employees who aren’t paying into a pension was first mooted by the late Seamus Brennan as far back as 2006, when he was Minister for Social and Family Affairs. In 2018, the then-Minister for Employment Affairs and Social Protection, Regina Doherty published a ‘strawman’ proposal.

While there have been a number of revised go-live dates for the new system, it does now appear that progress is being made on the legislation front.

What’s the latest on pension auto-enrolment in Ireland?

In March 2024, the Department of Social Protection announced that Cabinet had approved the Automatic Enrolment Retirement Savings System Bill. This new law went before the Oireachtas in April and was passed into law on 9th July.

Amongst other things, the legislation establishes an independent public body, the National Automatic Enrolment Retirement Savings Authority (NAERSA), to administer the new system and ensure compliance, under the aegis of the Department of Social Protection.

The state has also named a preferred supplier, Tata Consultancy Services (TCS), to provide the technology and managed services that will be the backbone of the auto-enrolment system. However, it’s understood that contracts have yet to be signed.

When will pension auto-enrolment in Ireland start?

Minister for Social Protection Heather Humphreys has postponed the rollout of the scheme to 30^th September 2025. 

What will pension auto-enrolment in Ireland look like?

The legislation provides for the establishment of NAERSA as the new state body that will act as a central processing authority (CPA). It will be responsible for collecting contributions from employers, employees, and the state. It will then pass those contributions to investment funds; and paying out pensions from each individual’s pension pot (which will follow them from employer to employer). NAERSA will contract out administration and investment services through open procurement.

The Authority will also work with the Department of Social Protection to provide ‘self-service’ functionality. This will allow employees to review investments and manage their contribution options through an online portal. It may use the Revenue Authority’s MyAccount services or a similar tool.

Learn more: Ireland pensions auto-enrolment: Guide for payroll and HR

Still to do: crucial for successful rollout

We believe four key things are crucial in order to get auto-enrolment off the ground:

The commissioning of NAERSA

While the legislation provides for a central processing authority (NAERSA), the body itself has yet to be established. There will also be a Board of Authority, supervised by the Pensions Authority, to hold NAERSA to account. The Board will report to the Minister for Social Protection, Heather Humphreys TD, who will appoint five to eight members. The Financial Services and Pensions Ombudsman services will also be available to participants. 

Engagement with payroll providers

Payroll software providers will be the conduit between contributing employees, employers, and NAERSA. This is likely to happen via technology and a managed service provided by TCS. As such, meaningful engagement between the Department and payroll providers will be essential to facilitate the automation of the enrolment and contribution processes. To date, there has been little communication from the Department to payroll providers about the workings of the scheme and a target effective date for implementation. Unfortunately, this leaves payroll providers in a difficult position in terms of attempting to keep their clients informed of preparation activities, software release plans, and readiness deadlines. So, there’s still a lot to do in this space.

Investment management services

It’s understood that several providers will carry out this function and offer low, medium, and high-risk investment options.

These pivotal services would be subject to a tender process to select and onboard the right investment management partners. While it’s thought that this tender process may have commenced, it has not yet concluded. 

Communication and change management strategy

A target population of 800,000 workers, and their employers, need to be considered when it comes to the auto-enrolment process. There’s also a cost-of-employment consideration for businesses. Initially, the employer will be required to contribute just 1.5% of an employee’s salary to the scheme. However, this cost quadruples in stages over a 10-year period.

Given the scale of the scheme, a clear communication and change management strategy will do much to help prepare and land the new policy.

Are Irish businesses ready for auto-enrolment? Find out here.