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Ireland

Ireland: 2025, Looking Ahead

1. Pensions Auto-Enrolment

The introduction of a Pensions Auto-Enrolment Scheme, which will be known as “My Future Fund,” will commence in Ireland on 30 September 2025. This is a delay from the initially planned introduction of January 2025. The legislation that governs this is the Automatic Enrolment Retirement Savings Systems Act 2024.

Key points of the scheme include:

  • Eligibility: Workers aged 23-60 who are employed but not enrolled in an occupational pension scheme or PRSA and who earn more than €20,000 annually. Employees younger than 23 and older than 60, or those earning less than €20,000 per year, will be able to opt into the scheme if they wish.
  • Contributions: Employee contributions will be matched by employers and topped up by the State. The scheme will be phased in over 10 years, with initial employee and employer contributions starting at 1.5% of gross salary and increasing in 3-year intervals by 1.5% until eventually reaching 6% by the tenth year. Contributions will be capped at €80,000 of gross earnings. The State will provide a top-up contribution at a rate of €1 for every €3 contributed by an employee and employer. Contributions will be fixed at a set rate, and it will not be possible for an employee or their employer to pay more or less than the fixed rate.
  • Opt-out & suspension: Employees can opt out during months 7 and 8 after enrolment and receive a refund of their contributions. In that event, employer and state contributions will stay in the employee’s pension pot, and will not be refunded to the employer or State. Employees will also be able to suspend auto-enrolment for a minimum of one year and a maximum of 2 years, if they wish. If that suspension happens, the employer and State contributions will also be paused during that time.
  • Administration: The National Automatic Enrolment Retirement Savings Authority (NAERSA) will manage the scheme, commencing operations on 31 March 2025. NAERSA will be responsible for administering the scheme, ensuring compliance, collecting all the contributions, and investing the money on an employee’s behalf. NAERSA will use Revenue payroll data to determine eligibility and will manage an online portal for both employees and employers to facilitate the scheme’s operation.
  • Purpose: To encourage earlier pension contributions, ensuring individuals have more than solely the State pension upon retirement.

 

Employers are advised to:

  • Stay informed and keep up to date with the latest information from the Department of Social Protection, the Pensions Authority, and NAERSA.
  • Map out the workforce to determine who is or isn’t going to be enrolled. Employers should review their current pension arrangements and eligibility requirements to determine how their scheme(s) will interact with My Future Fund and whether there will be employees who will be eligible for auto-enrolment. If employers do have a pension scheme currently in place, but not all employees are enrolled – employers might consider inviting those employees to be members of your existing pension scheme rather than having them auto-enrolled.
  • Develop some form of communication strategy with employees about My Future Fund, how it will affect them, the contribution rates, and the opt-out process, particularly if employers have a large number of employees who will be enrolled.
  • Budget for contributions and plan for the additional cost of employer contributions, which will start at 1.5% of eligible employees’ salaries;
  • Prepare payroll systems. Employers should work with payroll providers to ensure their systems can handle the new contribution requirements.

2. Expanded Gender Pay Gap Reporting

The EU Directive on Pay Transparency (the “Directive”) came into force on 7 June 2023 and must be implemented into national law by EU Member States (including Ireland) by June 2026. Among other things, the Directive sets out minimum standards regarding pay transparency that EU Member States are required to implement in terms of:

• a gender pay gap reporting regime (which has been in place in Ireland since 2022);

• a ban on contractual terms, which restrict employees from disclosing information about their pay; and

• a ban on employers asking job candidates about their pay history and their existing salary.

In addition, job seekers will also have certain new information rights under the Directive, for example, employers will be obliged to disclose the initial pay level or range in the job advert or before the job interview. Existing employees will also have the right to request information from their employer on their individual pay level and on the average pay levels, broken down by gender, for employees doing the same work or work of equal value.

While Ireland already has existing gender pay gap reporting legislation, new legislation will need to be introduced in due course by the Irish Government to ensure that the gender pay gap regime complies with the Directive and to ensure that the other additional measures prescribed in the Directive are implemented into Irish law by the relevant deadline.

Additionally, the Gender Pay Gap Information Act 2021 requires certain employers in Ireland to prepare a report on their gender pay gap. The threshold will be extended to include employers with 50 or more employees in 2025. This expansion aims to highlight pay disparities and to hold more employers accountable for addressing gender-based wage differences.

3. Increased Statutory Sick Leave

Statutory sick pay (“SSP”) was introduced in Ireland by the Sick Leave Act 2022 (the “Act”) on a phased basis in 2023. Employees with at least 13 weeks of continuous service are currently eligible for up to 5 days of SSP per year. SSP is calculated at 70% of normal pay, with a daily cap of €110. A medical certificate from a registered practitioner is required for each day of sick leave.

Under the legislation, SSP was due to increase to 7 days on 1 January 2025 and 10 days in 2026. The Act permits the Irish Government to specify such number of statutory sick leave days as they consider appropriate having regard to expert opinion, research, and national or international reports, among other things. Research was conducted in 2024 to consider the impact of the introduction of statutory sick leave to date. The results of the survey were received and analysed by officials from the Irish Government Economic and Evaluation Service and are currently being considered by the Minister.  

A Ministerial Order to vary the SSP entitlement was therefore not made on 1 January 2025 and SSP currently remains at 5 days per year.

4. National Minimum Wage Increase

The National Minimum Wage increased on 1 January 2025 by €0.80 per hour to €13.50 for workers aged 20 and over, under changes announced in Budget 2025. The Irish Government’s decision aligns with its commitment to gradually raise the minimum wage to 60% of hourly median wages by January 2026, as guided by the Adequate Minimum Wages Directive adopted by the European Parliament and Council.

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