No pension? No problem

Auto-enrolment (AE), known as ‘My Future Fund’, is set to launch in Ireland on 1st January 2026. This new pension system aims to address the retirement savings gap for employees who currently do not contribute to a workplace pension. As the launch date approaches, it’s essential for employees to understand how this change will impact them.

Ronan O’Neill, Head of Broker Marketing asks Niall Fitzgerald, Head of Retirement Solutions at Zurich what AE means for employees and what impact it will have on their pension savings.

Q: What is auto-enrolment?

A: Auto-enrolment is described as a ‘quasi-mandatory pension system’ introduced by the Irish government. While participation is automatic for eligible employees, there is an opt-out option after six months.

Q: Who will be enrolled?

A: Eligibility is straightforward: employees aged 23 to 60, earning over €20,000 per year from any employment, and not currently contributing to a workplace pension, will be auto enrolled.

Those that are eligible are those that don't currently contribute to a workplace pension. If they are aged between 23 and 60 and earning over €20,000 from any amount of employment, they will be auto enrolled come the 1st of January.

The system also accounts for multiple employments, so employees with combined earnings over the threshold will be included.

Q: What should employees do now?

A: With the launch imminent, employees are encouraged to educate themselves and take action if needed. Reliable information is available on the government’s auto-enrolment website and Zurich’s corporate hub, which also features a calculator to help employees assess their options. These resources are designed specifically to answer queries from employees.

Q: If comparing AE with a workplace pension, what should employees be mindful of?

A: A key distinction is how contributions and benefits are structured. Auto-enrolment involves net deductions with a State top-up, while traditional workplace pensions are based on tax relief from gross earnings. This difference is particularly significant for higher-rate taxpayers.

Auto-enrolment is going to be a net deduction. So, it's going to be calculated on gross earnings but deducted from their pay with a State top-up. And that's very different.

Higher rate taxpayers can get tax relief for 40%. So therefore, it's not a marginal difference. It's quite a significant difference between what’s on offer for higher rate taxpayers through workplace pensions compared to what auto-enrolment will give them.

Q: How flexibile are workplace pensions compared to AE?

A: Workplace pensions often offer higher contribution rates and greater flexibility, such as the ability to make additional voluntary contributions and choose retirement age. Auto-enrolment, by contrast, has fixed contribution levels and less flexibility.

My Future Fund is set out from the 1st of January with fixed contribution levels, which is 1.5% from the employee matched by the employer, with the 0.5% top-up, from the State. So, that is 3.5% invested on their behalf. That's far less than what the average workplace pension would offer.

Q: Can you tell us why AE matters?

A: Despite some drawbacks, auto-enrolment is seen as a positive step for Ireland’s ageing population, helping more people save for retirement and supplement the State pension.

At Zurich we are very positive about the introduction of auto-enrolment. It's long overdue. We have an ageing demographic in Ireland and it's important that we encourage people to save for their retirement above what their entitlements are within the State pension. And auto-enrolment does that.

Q: What are the next steps for employees?

A: Employees are urged to use available resources, speak with their employers, and ensure they are prepared for the changes coming in January 2026.

For anyone reading this, make sure to visit the zurich.ie hub. Use our calculator and make sure to speak to your employer as well. Find out what their plans are in relation to auto-enrolment. It's coming on the 1st of January, so make sure that you're ready.

The information contained herein is based on Zurich Life’s understanding of current Revenue practice as at December 2025 and may change in the future.

This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice.