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The Automatic Enrolment Retirement Savings Systems Bill 2024 was published by the Minister for Social Protection on 5th April and is currently in the process of being debated in the Dáil. The Bill provides for the establishment of an automatic enrolment retirement savings system (i.e. Auto-Enrolment) for employees in employment who are not covered by a qualifying pension scheme. It also provides for the establishment of a new State body to be known as An tÚdarás Náisiúnta um Uathrollú Coigiltis Scoir (National Auto-Enrolment Retirement Savings Authority), which will administer the system for and on behalf of the participants. The Scheme is due to commence in January 2025.  

Some of the main points are as follows:  

The National Auto-Enrolment Retirement Savings Authority (NAERSA) will be the body responsible for the administration of Auto-Enrolment (AE). It will:  

• Decide which employees should be enrolled and inform employers.  
• Collect contributions from employers and the State and distribute them to Registered Providers for investment.  
• Operate an online portal where employees can log into their account, see their account balance, and make decisions such as opting out.  
• Provide printed statements to those who do not have digital access. 
• Facilitate the ‘pot-follows-member’ approach whereby employees will have only one account with NAERSA over their working life.  

Automatic Enrolment (AE) for Employees 

• Employees aged between 23 and 60 years, who earn more than €20,000 a year across all employments, and who are not currently a member of a workplace pension scheme or PRSA, will be automatically enrolled in the AE scheme.  
• Employees outside the earnings and age brackets, who are not a member of a workplace pension scheme or PRSA, may opt into the scheme.  
• Eligible employees will be enrolled in the scheme for the first 6 months. There will be a 2-month window during month 7 and 8 where employees can opt out. 
• Employee contributions will start at 1.5% of the gross pay. They will increase to 3% in year 4, 4.5% in year 7, and 6% in year 10.  
• In month 7 and 8 following each rate increase, employees will also be able to opt out.  
• Employees who opt out will receive a refund of their employee contribution. The employer contribution and State contribution will remain in the pot.  
• Employees will be able to suspend their contributions at any time outside of the 6-month mandatory participation period. 
• Every €3 an employee contributes will be matched by an employer contribution, and the State will also top-up by a further €1. Employer and State contributions will be capped at an upper earnings limit of €80,000 per year.  

Automatic Enrolment (AE) for Employers 

• Eligible employees, who are not provided with a workplace pension or PRSA in that employment, will be automatically enrolled.   
• Employers will not be responsible for deciding who should be enrolled.  
• Employers will need to ensure that their payroll software will be capable of taking an enrolment instruction, calculating, and returning contribution amounts to the Authority.  
• While contributions will be calculated based on the employee’s gross pay, they will be deducted from the employee’s net pay.  
• Employers will be required to match the employee’s pension contribution, subject to an upper earnings limit of €80,000.   
• Employer contributions will be deductible for income tax/corporation tax purposes. 
• Employers who fail to meet their obligations will be subject to penalties and possible prosecution. 
• Employers cannot penalise or threaten to penalise their employees for exercising their right to participate in auto-enrolment. 

Automatic Enrolment (AE) for the Pensions Industry 

• AE is being designed to run in parallel with the existing pensions industry. 
• Existing pension schemes or PRSAs will continue. Employees who are contributing (or where their employer is contributing) to a workplace pension or PRSA will not be eligible for AE.   
• Pension providers will have the opportunity to be involved in the AE system and those selected to provide investment management services will be called Registered Providers. 
• Registered Providers will not have any direct contact or relationship with employees.