Navigating Pension Auto Enrolment

Peavoy Financial Planning talks Pension Auto Enrolment

A Guide for Laois Employers

The Auto Enrolment Pensions Bill was passed by Government on the 27th March 2024. With the proposed start date scheduled for January 2025, understanding and implementing pension auto enrolment is now crucial for all employers in Laois.

What is Pension Auto Enrolment?
Pension auto enrolment is a government initiative designed to encourage more people to save for their retirement by automatically enrolling eligible employees in a pension.

Who will be automatically enrolled?
Approximately 800,000 employees who are aged between 23 and 60, earning over €20,000 across employments and who are not already enrolled in an occupational pension scheme or a qualifying PRSA with an employer making contributions.

What is Exempt Employment?
An employment, whereby the employer makes contributions for the benefit of the employee to a qualifying pension scheme or PRSA. The “Authority” shall draw up standards that these pension products must meet in order to exempt employees from auto enrolment.

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

How much will it cost?
Contributions will be paid by employee’s and matched by their employers, as a percentage of the employee’s gross income. The State will top up the rest. The rates of contribution will be phased in gradually over a decade as follows:

Year 1 – 31.50%1.50%0.50%
Year 4 – 63%3%1%
Year 7 – 94.50%4.50%1.50%
Year 10 +6%6%2%

Employer contributions and State Top Up will be capped using a maximum of €80,000 of any employee’s gross salary.

Where will Auto Enrolment pension contributions be invested?
The Auto Enrolment investment fund providers have yet to be determined but the risk levels have been determined as High, Medium and Low risk. Employees who do not make an active choice will be placed in a default investment strategy on a ‘lifecycle’ basis’, moving them from the higher to the medium to the lower risk fund in accordance with their age as they approach retirement.

Can Employers choose to have their own Occupational Pension instead of Auto Enrolment?
If Employers take no action, the Auto Enrolment eligible employees will be picked up and put into a state-run pension by the newly established government body.
Employers can take action and establish their own qualifying pension scheme to ensure a consistent pension experience and rules for all employees.

Conclusion – What do Employers need to do now?
Pension auto enrolment is a significant development in Ireland’s retirement landscape and employers have a crucial role to play in its success. By understanding their responsibilities, communicating effectively with employees and selecting the right pension solution, employers can help their workforce secure a brighter financial future. At Peavoy Financial Planning we recognise that there is unlikely to be one single approach that is appropriate for all employers and employees, but we believe that embracing the concept of auto enrolment will strengthen the overall financial well being of society in the long run. Should you require a quick comparison comparing the proposed Auto Enrolment Scheme and existing workplace pension features or would like to explore this topic further, you can make contact with me by e-mail on 

David Peavoy BA, QFA, LIAP is a Director of Peavoy Financial Planning Limited whose practice is based in Office 5b, Portlaoise Enterprise Centre, Clonminam Business Park, Portlaoise, Co Laois.

Peavoy Financial Planning Limited is regulated by the Central Bank of Ireland

Disclaimer: All data and information provided within this blog is for information purposes only. It should not be taken as specific advice for your situation. Peavoy Financial Planning Limited makes no representations as to the accuracy. completeness, or suitability of any information and will not be liable for any errors, omissions or delays in this information or any losses, injuries or damages arising from its use


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