From January 2026, auto-enrolment (AE) will change how many people in Ireland save for retirement. Employers will be required to enrol eligible staff into a pension scheme by default. For HR managers, this means preparing the workforce for a significant change.

It also means supporting employees to understand how contributions will affect their take-home pay and their long-term financial future. If you are managing HR or payroll in a business that does not yet offer a pension scheme, here is what you need to know.

Who Will Be Enrolled?

Employees will be auto-enrolled if they:

  • Are aged between 23 and 60
  • Earn more than €20,000 per year (across all jobs combined)
  • Are not already paying into a pension through payroll

Once enrolled, contributions will begin in January 2026. Employees can opt out after six months, but they will be re-enrolled every two years if still eligible.

How Contributions Work?

AE starts small and increases over time:

  • Years 1 to 3: Employee pays 1.5% of salary. Employer matches 1.5%. The State adds €1 for every €3 the employee contributes.
  • Years 4 to 6: 3% each from employee and employer
  • Years 7 to 9: 4.5% eachYear 10 onwards: 6% each

For every €3 the employee contributes, the State adds €1, turning it into €4 before investment growth.

What This Means for Take-Home Pay

At the beginning, an employee earning €30,000 will see €450 deducted per year, or around €8.65 per week. The employer will contribute the same, and the State will add €150. By year ten, this grows to €1,800 from the employee, €1,800 from the employer, and €600 from the State. This money is locked away for retirement but could build into a significant pot over time. Employers will not manage investments or scheme administration. That role belongs to the new Central Processing Authority.

📌 Useful link: Gov.ie – My Future Fund

Pros and Cons for Employees

There are clear positives. AE builds a pension automatically, with support from both employer and State. The State top-up works out at a 25% uplift, which is more generous than standard tax relief for many. However, AE may not suit everyone. It lacks early access options, and some higher earners may benefit more from existing company pensions with higher tax relief. Contributions may also feel low if employees are starting late.

Challenges for HR Managers

HR teams will be the first point of contact when AE questions arise. The scheme will not provide tailored advice or employer-specific guidance.

This means HR managers must be ready to answer:

  • Why is money being deducted?
  • How are the investments chosen?
  • What happens if employees opt out?

How does AE compare to the existing pension scheme?

Clear communication will be essential to prevent confusion or concern. Supporting Your People: Practical steps for HR include:

  • Information sessions: Explain AE in plain, simple language.
  • Clear resources: Help employees understand the scheme and their options.
  • Regular reminders: Keep staff updated as contribution rates change.

Some employers are choosing to bring in regulated financial advisors to run workshops or offer one-to-one support. This can reduce pressure on HR teams while increasing employee confidence.

What HR Managers Should Do Now

AE may not launch until 2026, but preparation starts now. Here is how HR teams can support management, payroll, and employees before the rollout.

  • Review Your Current Pension Scheme
        • Take stock of what already exists:
        • Do you offer a pension scheme?
        • Who is enrolled and who is not?
        • What are the contribution rates?

This review will help you understand who will be auto-enrolled and whether your current scheme needs updating.

  • Talk to Management: Management will expect clarity around timelines and financial impact. Use this time to align HR and leadership on:

        • The cost of matching contributions
        • Whether to enhance or replace an existing pension scheme
        • How to divide responsibilities between payroll, HR and finance

  • Check Payroll Systems: AE depends on accurate salary data. It’s worth ensuring:

        • Ask your payroll provider about their AE readiness and reporting options.
        • Your payroll software is updated
        • Employee data is accurate
        • Eligibility by age and salary is tracked correctly

  • Plan Internal Communications

      • HR must prepare to explain AE across the organisation. This includes:
      • Draft FAQs.
      • Visual explainers or internal videos\A communication timeline.
      • You cannot encourage opt-outs, but you can ensure staff understand what is happening and why.

 

📌 Many employees will want to know how AE compares to PRSI or private pensions. Partnering with a financial advisor can help provide clear, independent answers.

  • Upskill Your HR Team

      • Ensure your team is ready to:
      • Answer staff questions confidently
      • Run AE information sessions
      • Explain options without giving financial advice
      • Consider running internal workshops or seeking support from a regulated advisor.

  • Build a Partnership with an Advisor

      • A financial advisor can help your organisation:
      • Prepare AE communications
      • Deliver staff workshops
      • Provide one-to-one sessions where appropriate

At Lynx Financial Services, we work with HR teams to make pensions more accessible and less stressful.

Culture, Choice and Conversations

AE may be automatic, but it will trigger wider conversations about money, retirement and personal priorities.

Employees will ask:

  • Should I stay in AE or join the company scheme?
  • Can I save more than the minimum?
  • What happens if I leave the company?

These questions are opportunities to strengthen your culture around financial wellbeing.

In Summary

Auto-enrolment is coming in 2026. HR managers have a key role to play in:

      • Preparing the organisation
      • Supporting employees
      • Communicating clearly
      • Ensuring a smooth rollout

The sooner you start, the easier it will be.

Next Steps

AE is a legal requirement, but how you approach it is up to you. You can meet the minimum standard, or you can use this as an opportunity to enhance your employee benefits. Whichever route you choose, the time to prepare is now.

📩 Get in touch for a no-pressure chat about what might work for your business.