Ireland’s auto-enrolment system: Updated minimum pension contributions employers must meet in 2026

5 Febuary 2026

The Automatic Enrolment Retirement Savings System Act 2024, together with the Automatic Enrolment Retirement Savings System Regulations 2025 and Automatic Enrolment Retirement Savings System Regulations (Amendment) (Section 52) 2025, mark significant changes to Ireland’s pension landscape.

The Section 52 Regulations now confirm the minimum contribution levels required for employees to be exempt from automatic enrolment into the new My Future Fund (MFF) pension scheme. These rules are now in effect and will have important implications for both employers and employees, as the State moves towards universal workplace pension coverage. For background on pension auto enrolment, see our earlier analysis: Employment (Contractual Retirement Ages) Bill 2025 - KPMG Law LLP

What do the new Regulations require?

Employers aiming to ensure their employees are in receipt of a payroll-based pension benefit and thereby exempting their employees from automatic enrolment into MFF, must ensure that their defined contribution occupational pension scheme or PRSA (Personal Retirement Savings Account) contributions meet specific thresholds:

Employers minimum contribution:
Employers must contribute at least 1.5% of an employee’s gross pay (within the meaning of s. 47 of the Automatic Enrolment Retirement Savings Scheme Act 2024, which includes all taxable earnings such as bonuses), or €1,200 per year, whichever amount is lower.
Total minimum contribution:
The combined contributions from both employer and employee must reach at least 3.5% of gross pay, or €2,800 annually, again applying the lesser amount.

Upon these minimum contributions being satisfied, the employee is considered to be in “exempt employment” and will not be automatically enrolled in MFF. In such cases, the employer has no further obligations regarding MFF contributions for that employee.

For defined benefit schemes, exemption will be granted on the basis that the scheme confers a long-term benefit based on continuing employment. The defined benefit test differs in that it is judged on benefit entitlement not contribution mechanics. In other words, non-contributory defined benefit schemes can create exempt employment.

Special consideration: employee contributions

Where an employee does not make personal contributions to a PRSA or defined contribution occupational pension scheme, the employer must make up the full 3.5% (or €2,800, whichever is lower) to maintain exempt status for that employee. If this is not done, the employee will be auto enrolled into MFF and the employer will be subject to the scheme’s contribution requirements.

Who will be auto enrolled?

Since 1 January 2026, employees who do not meet the exemption criteria will be automatically enrolled in MFF if they:

Are aged between 23 and 60;
Earn more than €20,000 per year (across all employments); and
(i) Are not already in receipt of contributions of at least 3.5% of gross pay (or €2,800, whichever is less) into a qualifying pension arrangement of which at least 1.5% of gross (or €1,200 whichever is lower) is paid by the employer or;
(ii) are not a member of a defined benefit scheme which confers a long service benefit based on continuing employment.

Compliance and enforcement

The Department of Social Protection has indicated that the National Automatic Enrolment Retirement Savings Authority (NAERSA) will focus on verifying that pension schemes seeking exemption are meeting the required standards. While there has been mention of a three-month assessment period for compliance, the Regulations themselves do not specify any grace period. NAERSA has confirmed that it will shortly publish information on the process it will apply to make exemption assessments and determinations. NAERSA has emphasised that its approach will be to assist employers to achieve compliance rather than to impose penalties. In particular, NAERSA will apply a 13-week lookback to 1 January 2026 at the earliest, using gross pay and pension contribution figures recorded through payroll submissions to the Revenue Commissioners, to determine whether exemption standards are being met. Employers are strongly encouraged to act now to avoid potential penalties, which may include fines, arrears, interest, public listing of non-compliance, or referral to the Workplace Relations Commission.

What should employers do now?

Review pension arrangements:
Assess your current occupational pension or PRSA contributions to ensure they meet the new minimum standards.
Engage with employees:
Communicate with staff whose contributions fall below the new threshold, as early engagement will help avoid confusion and ensure compliance.
Prepare for reporting:
Keep accurate records and be ready to demonstrate compliance if requested by NAERSA. Do not rely on the absence of an Auto Enrolment Payroll Notification (AEPN) as confirmation of compliance.
Take prompt action:
If your scheme does not meet the exemption criteria, take steps to either increase contributions or prepare for the enrolment of eligible employees into MFF.

Conclusion

The Regulations represent a major shift in Ireland’s approach to retirement savings, placing a clear responsibility on employers to ensure their pension offerings are up to standard. Acting now will help organisations avoid penalties and support their employees’ long-term financial well-being.

How we can help

At KPMG Law LLP, our Employment Law team led by Aoife Newton, is ready to assist with all employment aspects of workplace pension compliance and auto-enrolment. We offer practical advice on meeting the new minimum contribution standards, managing exemption applications, and communicating changes to your workforce. For further information or tailored support, please contact a member of our team.