Auto-Enrolment in the New Pension Savings Scheme

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Prepare to take control of your financial future with the upcoming introduction of Auto-enrolment, a revolutionary pension savings scheme anticipated to launch in late 2024. This initiative targets specific employees not currently contributing to a pension, automatically enrolling them in the scheme while allowing an opt-out option after 6 months. Auto-Enrolment in the New Pension Savings Scheme

Key Features:

  1. Inclusive Criteria for Automatic Enrollment:
    • Age between 23 and 60
    • Not currently part of a pension plan
    • Annual earnings of €20,000 or more
  2. Employer Involvement and Penalties:
    • Employers are obligated to participate, facing penalties and possible prosecution for non-compliance.
  3. Flexibility for Participants:
    • Enrolled individuals must commit for at least 6 months.
    • Option to exit the plan in months 7 or 8.
    • Provision to stop or pause contributions under specific circumstances.
    • Re-enrollment after 2 years for eligible participants.
  4. Exemption for Workplace Pension Holders:
    • Those already contributing to a workplace pension plan are exempt from auto-enrolment.
  5. Contributions Breakdown:
    • Participants contribute a set percentage of their annual salary.
    • Employers match contributions, and the government adds an extra amount.
    • Progressive contribution rates from 1.5% in the first year to 6% by year 10.

Contribution Breakdown:

YearEmployee Contribution RateEmployer PaysGovernment Pays
1 to 31.5%1.5%0.5%
4 to 63%3%1%
7 to 94.5%4.5%1.5%
10 and after6%6%2%

Example for a Worker Earning €20,000 a Year:

YearEmployee Pays (€)Employer Pays (€)Government Pays (€)Total Payments per Year (€)
1 to 3300300100700
4 to 66006002001,400
7 to 99009003002,100
10 and after1,2001,2004002,800

Maximum Contribution Limits:

  • Employer and Government contributions capped at €80,000 gross annual salary.
  • Participants earning over €80,000 can still contribute, but matching contributions cease beyond this threshold.

Empower yourself with knowledge! Explore the Department of Social Protection’s video on auto-enrolment and find additional information online. For inquiries, contact autoenrolment@welfare.ie. Your financial future awaits!

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1 thought on “Auto-Enrolment in the New Pension Savings Scheme”

  1. I was in a pension but this pension was shutdown and my pension is now a deferred pension until my retirement. My employer then transferred me to another company under TUPE without alternative pension arrangements. Will I still be able to enroll in this?

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