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Auto-Enrolment: Important update for employers

Conditions for exemption

To be exempt from the obligation to comply with auto‑enrolment into MyFutureFund, both of the following must apply (subject to a new minimum contribution standard from 1 January 2026 – see below):

The employee is already a member of an approved occupational pension scheme, PEPP, RAC (or where an employer contributes to an employee’s PRSA)
Contributions are being made through payroll and reported to Revenue in the Payroll Submission Request (PSR)

One of the conditions for Revenue approval of an approved pension scheme is that the employer must make contributions to the pension scheme (historically, there was no specific minimum employer contribution level).

What’s changed?

The Revenue Commissioners have recently clarified the prescribed minimum level of employer pension contribution necessary to meet the requirements for approval of the pension scheme.

These minimum contribution requirements apply to all approved occupational pension schemes (both defined contribution and defined benefit) as well as to PRSAs (which have been reflected in the payroll) and take effect from 1 January 2026.

The table below sets out the minimum contribution levels that apply to each type of pension arrangement in 2026.

Pension type	Contribution measure	Minimum from 1 January 2025
DC scheme / PRSA	Minimum employer contribution	Not less than the lower of: i. 1.5% of employee's gross pay, or ii. €1,200 in any year
DC scheme / PRSA	Minimum combined employer and employee contribution	Not less than the lower of: i. 3.5% of employee's gross pay, or ii. €2,800 in any year
DB scheme	Minimum benefit entitlement	Continuing service in the scheme must entitle the employee to accrue a "long service benefit" as defined in Section 2(1) Pensions Act 1990

Employers should therefore ensure that their pension scheme(s) and/or PRSAs meet the minimum standards in order to:

qualify for exemption from Auto‑Enrolment (MyFutureFund); and
continue to meet the conditions for Revenue approval of the occupational pension scheme.

Is there anything else I should be aware of?

One area that employers might overlook is the requirement for contributions to be based on an employee’s gross pay (which typically would include variable pay/bonus, commissions, benefits, share awards etc.). Historically, pension contributions may have been based on an individual’s basic pay. Consequently, there is a risk that under the new regime, an employer could fail to meet the minimum contribution levels (and thus fail to qualify for exemption from auto-enrolment).

As a result, employers should review the basis on which they are calculating the employer/employee contributions and ensure they meet the prescribed minimum thresholds.

What are the consequences if I fail to satisfy the minimum contribution requirements?

The National Automatic Enrolment Retirement Savings Authority (NAERSA) will monitor and review compliance using a 13-week lookback period (approximately three months) commencing from 1 January 2026. This will involve examining employer payroll data submitted to Revenue.

Where a shortfall is identified, employers may be required to:

increase employer contributions;
enrol affected employees into MyFutureFund (and thus risk dual pension contribution costs for both the employer and employee);
address any underpaid contributions, potentially on a backdated basis; and
pay interest and/or penalties where engagement does not occur.

Furthermore, the Authority may seek confirmation that a shortfall will be corrected and seek evidence that it has been corrected.

Non‑compliance may result in NAERSA recovering unpaid contributions and employers facing fines of up to €50,000 on conviction.

What do I need to do?

Employers should review their existing pension scheme structures and satisfy themselves that:

they are correctly applying the minimum employer and employee contribution limits, and
the contribution is being calculated on the correct level of remuneration (i.e. the gross pay).

Where contributions are below the standards, swift action should be taken to either uplift the existing arrangement or prepare for affected employees to be enrolled into MyFutureFund, to avoid the risk of dual contributions.