TechTalk: New Minimum Contribution Standards for workplace pensions

What’s changing?

From 1st January 2026, new rules around the minimum contribution rates for both Employers and Employees in workplace pensions apply.

To stay compliant with Auto-enrolment regulations and to keep being exempt from AE, employers need to meet these new rates.  

For DC Workplace Pensions

• Employer contributions: These must be at least 1.5% of an employee’s gross pay, or €1,200 per year (whichever is lower).

• Total contributions: Combined employer and employee contributions must be at least 3.5% of gross pay, or €2,800 per year (whichever is lower). The contribution in excess of the mandated employer contribution (remaining 2% or €1,600) can be paid by the employee, employer or split between the parties.

For Defined Benefit (DB) Schemes

• Employees must be accruing a “long service benefit” in the scheme for the employment to qualify as exempt.

What does this mean for employers and their employees?

Compliant workplace pensions: If employees are already in a workplace pension, like a Master Trust or PRSA, and it meets the new minimum contribution standards, no action is needed. Their employment will be considered “exempt” from the AE system. For most workplace pensions, this will be the case.  

Non-compliant workplace pensions: Some workplace pensions may not meet the minimum contribution standards. To be clear this will be assessed by NAERSA.  

NAERSA will assess whether the pension contributions for an employee are meeting the required standards over a three month period. This period helps calculate the required minimum contribution, considering things like seasonal changes and earnings which may change each month such as overtime. Where a workplace pension doesn’t meet the contribution standards for an employee, then that employee will be subject to enrolment into My Future Fund, unless the employer can reach an agreement with NAERSA to ensure compliance which would require adjusting their workplace contribution rates to meet the standards. 

Where an employer doesn’t make an effort to meet the standards or let their staff join My Future Fund, NAERSA will take further action. This could mean fines or prosecution for employers.

The aim behind the changes

As highlighted by Minister Dara Calleary in a recent update on My Future Fund, the standards have been put in place to ensure that pension arrangements outside of My Future Fund are at least as favourable for the participating employee as they would be under the introductory contribution rates in My Future Fund. You can read the full update from the Minister below including further detail on the new pension contribution standards introduced for exemption from My Future Fund here. 

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If you have further questions on any aspect of this TechTalk, please contact your Broker Consultant or the Technical Services team on 01 209 2020 or techsupport@zurich.com