Ireland: The Automatic Enrolment Retirement Savings System Act 2024

The Automatic Enrolment Retirement Savings System Act 2024 has now been enacted in Ireland and the first contributions will begin on 1 January 2025.

This Act provides for a new retirement savings scheme for workers who are not already members of a pension scheme.  All employees aged between 23 to 60 and earning over €20,000 who are not already in an occupational pension scheme will be automatically enrolled. Contribution rates will be introduced gradually over the course of a 10-year period beginning in 2025, with the employer and employee contributions starting at 1.5% increasing in 3-year intervals by 1.5% until eventually reaching 6% by year 10 (2034).

Employers will be notified which employees need to be enrolled in the scheme by the Central Processing Authority, which is a new entity that will be established by the Act.

Employers will match contributions made by employees up to a maximum of €80,000 of earnings.  The State will also top up contributions by €1 for every €3 saved by the employee, up to a maximum of €80,000 of earnings. This is in addition to the €3 that will also be contributed by the employer.

The system is voluntary and will operate on an ‘opt-out’ rather than an ‘opt-in’ basis. Eligible employees will automatically be enrolled/ ‘opted-in’ but will have the choice after six months’ participation to opt-out or suspend participation.