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YOU WILL HAVE seen the ads: a double scoop of ice cream with a cherry on top. After a 20-year wait since the Government first proposed putting workers into a pension saving scheme, auto-enrolment is happening.
If you are one of the three-quarters of a million employees whose first payslip of 2026 shows a new MyFutureFund deduction from your wages, chances are you’re going to be keen to know more about auto-enrolment.
Auto-enrolment is a big change to how we do pensions and plan for retirement in Ireland.
Up to now, you have had to take steps to join a pension to save for your retirement, either by signing up to be a member of your employer’s pension or by taking out a personal pension.
Auto-enrolment flips the need to be proactive about pensions. Everyone who is eligible is automatically placed into the new pension saving scheme known as MyFutureFund. You only need to (re)act if you choose not to be in the pension.
CSO figures show one-third of workers have no pension outside of the social welfare pension.
The Contributory State Pension is currently €15,000 a year. The job of this pension is to cover the basics to keep you out of poverty in old age. For most of us, going from a wage to €289.30 a week is a big drop in income.
Unless you have retirement savings to add to your social welfare pension, it will also mean a big drop in your living standards. While this drop is felt by individuals, a reduction in the spending power of over 66s will have wider economic consequences as the population ages.
When asked why they don’t have an occupational pension, more than two-thirds of employees said their employer didn’t have a company pension or their employer didn’t allow staff on their type of contract to join. It is only since the start of this year that employers are required to contribute to their employees’ retirement savings.
The PRSI you pay, and your employer pays on your behalf, funds your Contributory State Pension and the other contributory benefits for when you are out of work.
MyFutureFund will not replace the social welfare pension or the need for PRSI to fund it. It is in addition to it, in the same way as existing company pensions, to provide you with more money to spend on top of your State Pension for a more comfortable retirement.
You are automatically placed into MyFutureFund if you are:
You can voluntarily join if you are aged 18-22 or 61-66 or earning less than €20,000.
Your savings contribution into your MyFutureFund account will be deducted from wages earned after 1 January. The amount you save will be matched by your employer, and the State will put in a top-up in place of you getting tax relief on your contribution.
Your contribution will be set at a percentage of your gross (before-tax) earnings, which will gradually increase over the next 10 years.
For example, if you are earning €35,000 a year, €10 a week will now be deducted from your wages and deposited in your MyFutureFund account, your employer will also put in €10, and the State will add €3.35. By the end of this year, the total contributions towards your retirement savings will amount to €1,225.
Membership of MyFutureFund is mandatory for the next six months. If you want to leave, you will have an option to opt out in July and August. The money that was deducted from your wages will be returned to you. Your employer and State contributions will stop, while the contributions they made to-date remain invested in your pension pot. After two years, you will be automatically re-enrolled.
The experience from other countries when they introduced auto-enrolment is that only small numbers of workers choose to opt-out, in large part because they have seen how quickly their savings grew over the compulsory six months when added with their employer and State contribution. Employers who pressure their employees to opt-out will face fines of up to €50,000 and imprisonment for up to three years.
Recognising that there will be occasions that are harder on your pocket, there is also an option to pause making contributions for periods of up to two years.
You can monitor your pension pot on the MyFutureFund portal, see that all contributions have gone in, and select your preferred investment plan to grow your savings.
Your savings are your property, protected in law. You can access them at 66. There is no option for early access for any life event other than retirement. If you were to die before retirement age, your savings would go to your next of kin.
Auto-enrolment has successfully improved pension take-up everywhere it has been introduced. In the UK, for example, 88% of eligible employees are saving for their retirement, up from 55% before the introduction of auto-enrolment in 2012.
However, the measure of success is not the number of workers in a pension. Success will be determined by the number of workers with a decent retirement income.
The first hurdle to this will be the intense lobbying to slow down or stop the planned increases in minimum pension contributions and the omens don’t look good. Last year, the Government ripped up agreed plans on sick pay and a living wage. The campaign for the right to a comfortable retirement is far from over.
Dr Laura Bambrick is the Irish Congress of Trade Unions spokeswoman on pensions.
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