What are the existing obligations on employers to provide access to a workplace pension? 

There is currently no legislative requirement on employers to provide a workplace pension. Employers are legally required to provide employees with access to a Personal Retirement Savings Account (PRSA) however they are not obliged to make any contributions. As a result of this, there are approximately 800,000 employees in Ireland with no workplace pension. 

What will be the new obligations on employers once the scheme does commence? 

Employers will be legally obliged under the Automatic Enrolment Retirement Savings System Act 2024 to make contributions of a specific amount to a new state established retirement savings scheme. This scheme will be known as ‘The Future Fund’. Employees’ will be auto enrolled into the scheme on this date and employers, employees and the government will be obliged to make contributions from this date forward. Employees can auto enrol or opt in to the scheme for two or more separate employments.

How will this new scheme operate? 

The National Automatic Enrolment Retirement Savings Authority (NAERSA) has been set up by the government to administer The Future Fund. NAERSA is currently gathering the necessary data from the Revenue Commission to determine who will be eligible for auto enrolment into the scheme. Individual employees who are eligible will be auto enrolled into the scheme by NAERSA in time for intended 30 September 2025 deadline. 

NAERSA will then notify employers as to who these individual employees are, and employers are then under an obligation to notify the individual employees. Employers must then make the necessary deductions from the employees’ wages to ensure the employees’ contributions are being paid into the scheme and they must also make their own contributions into scheme on behalf of those individual employees. 

NAERSA will operate a portal for employees to be able to monitor all the contributions that are being made into the scheme and to manage their investment options within the scheme, which will consist of low, medium or high risk options. 

What employees will be eligible for enrolment into this scheme?
 
Eligible employees must be between the ages of 23 – 60 years, they must earn over €20,000 per year across all their employments, and they must not be currently paying into a pension plan via payroll. Any contributions via payroll of a nominal value into another scheme will exempt them. Employees between the ages of 18 – 23 years can voluntarily opt into the scheme if they are also not a member of another scheme via payroll. 

What will the contribution rates be on behalf of the employer, employee and the government? 

How will the contributions be calculated?

Contributions will be calculated on employees’ gross earnings, including overtime and allowances for example, and will be deducted from an employee’s net income. However, contributions are capped at earnings of €80,000 gross salary per year. NAERSA will notify employers when the maximum contributions have been made for an employee for that year. This will be important if an employee has more than one employer. Contributions from employers and employees will not be required for periods of unpaid leave.

Can employees opt out of the scheme, if so, what will the obligations be on employers once this happens?

Yes, employees will be able opt out of the scheme at various points in time during the first 10 years of the scheme. These points in time will be after the first 6 months of being auto enrolled in the scheme and after the first 6 months each time the contribution rates have increased. Employees will have a two-month period (from month 6 to month 8) to notify NAERSA that they wish to opt out. 

Employees who opt out will receive their contributions back for that preceding period however the contributions that have been made by employers and the government during that period will stay in the scheme and continue to be invested on behalf of the employee. 

Employees are automatically enrolled back into the scheme every two years, if NAERSA deems them still to be eligible for the scheme. 

Can employees suspend their enrolment into the scheme, if so, what will the obligations be on employers once this happens? 

Yes, after the first 6 months of being auto enrolled into the scheme (whether it’s for the first time or an employee has been auto enrolled back into the scheme after an opt out period), employees will be able to suspend their contributions for a minimum of one year and a maximum of two years. 

Employees will not receive their contributions back for this period as the scheme is essentially paused on their behalf. Contributions that have been made by employers and the government during that period will also stay in the scheme and continue to be invested on behalf of the employee. 

Employees are automatically enrolled back into the scheme every two years, if NAERSA deems them still to be eligible for the scheme. 

What will the benefits of the scheme be for employees when they reach retirement age?
 
The retirement age for the scheme is linked to the State Pension age which is currently 66 years. Employees will receive their pension from the scheme in a lump sum. If an employee passes away prior to reaching the required retirement age, their savings and investment returns will form part of their estate. Early retirement from the scheme will only be possible in the case of incapacity or exceptional ill-health and this will be assessed by NAERSA on a case-by-case basis. 

Will employees have any avenue of redress in relation to any decisions made in relation to the scheme? 

Employees may request an internal review by NAERSA of any decisions that have been made in relation to their entitlements within the scheme. Employees must request this review within 30 days of the decision being made. 

The outcome of an internal review may be appealed to an appeals officer who will be from a panel of NAERSA staff that have been appointed by the Minister. This appeal must be lodged within 30 days of review outcome. 

Appeals of the appeals officer’s decision can only be made to the High Court on a point of law. 

Do employees have any protection in relation to their right to be enrolled in the scheme?
 
Under s.127 of the Automatic Enrolment Retirement Savings System Act 2024 employees will be protected from any form of penalisation or a threat to penalisation which occurs because an employee exercised their entitlement to participate in the scheme. The definition of penalisation within the Act includes similar actions to those contained in the Protected Disclosures Act 2014 (as amended). 

Employers’ actions that amount to hindering or attempting to hinder an employee from participating in the scheme will also be prohibited under s.128 of the Act. 

Claims must be lodged under s.41 of the Workplace Relations Act 2015 and within ‘6 months beginning on the day immediately following the date of the occurrence of the dispute.’ An Adjudication Officer will have the authority to direct an employer to facilitate the scheme, and / or to pay the necessary contributions for that employee including retrospective contributions, and / or award a maximum of 4 weeks’ remuneration as compensation for the treatment.

Are there any consequences for employers who do not adhere to their obligations in relation to the scheme? 

Under s.131 and s.132 of the Act, the following actions will be deemed an offence and will carry fines between €5,000 - €50,000 and/or imprisonment for a term between six months - three years:

• The failure to notify workers of an auto enrolment determination from NAERSA. 
  
  
• The failure to pay or remit contributions into the scheme - either the employers or the employees. 
  
  
• The production of forged or false statements or documents - to evade paying contributions or to limit the amount to be paid. 
  
  
• Hindering or attempting to hinder an employee from participating in the scheme. 
  
  
• The unauthorised disclosure of confidential information.  
  
  
• The obstruction or failure to comply with NAERSA authorised officers, An Garda Síochána or a compliance noticed issued by them.

SIPTU

Website: https://www.siptu.ie/