A GOVERNMENT MEMO has said some large companies employing thousands of people worked with financial advisers to push staff into pension schemes with lower employer contributions than if they had signed up for auto-enrolment.

The moves were made late last year as the Department of Social Protection finalised plans for an auto-enrolment system for workers.

An internal note said some employees were “being compelled” to join schemes that had only just been put in place by their boss.

It said this included staff whose contracts did not provide for membership of a pension scheme and that forcing them to sign up might be a breach of employment law.

The note said the only contribution to the scheme would be 1% from the employer “with no suggestions of any increase over time.”

The document explained: “Such a low contribution level can be described as a nominal one that is unlikely to yield any material pension benefit in terms of adequacy.”

It said My Future Fund would offer 1.5% from the employer, 1.5% from the employee, and a 0.5% top-up from the State.

That was an introductory rate however, which would increase over time to combined contributions of 7% in 2029, 10.5% in 2032, and 14% in 2035.

The note said the companies involved in trying to circumvent the plan were “large companies employing many thousands of people.”

It said: “The companies concerned seem to have planned this, in conjunction with professional advice, to occur at the last minute as [auto-enrolment] is being launched.”
The document said that this was intended to deny the opportunity for any consultation or earlier action.

It also detailed how the Department had made direct contact with one of the largest companies involved – which had quickly “reversed [its] plan.”

The note added: “The companies involved intend to pay 1% of their employees’ pay – it isn’t really believable that increasing that to 1.5% is a significant budgetary burden that can’t be addressed.

“The commencement of My Future Fund and the contribution rates involved have been well known for years – so all of these companies are well versed in the budgetary implications.”

The note said that companies had also taken advantage of the postponement of the scheme from September 2025 to January 2026.

This had been done to accommodate employers, and it was “disappointing that this opportunity was used to develop avoidance measures instead.”

Asked about the records, a Department spokesperson said that prior to the introduction of My Future Fund they had received evidence about employer plans for compulsory enrolment in inferior schemes.

The spokesperson said: “These rates were lower than those provided for in the Automatic Enrolment Retirement Savings Act (2024) and would have excluded those employees from being automatically enrolled into the My Future Fund scheme.

“In order to address these concerns, the Minister prescribed standards through a Statutory Instrument in December that will ensure that pension arrangements outside of My Future Fund are at least as favourable for the participating employee as they would be under the current contribution rates in My Future Fund.”