Auto-enrolment: Minimum standards for exempt employment now published

The Minister for Social Protection (the Minister) has signed regulations prescribing minimum standards (the Standards) which occupational pension schemes and personal retirement savings accounts (PRSAs) will be required to meet in order to be considered “exempt” from the new State automatic enrolment pension system, MyFutureFund. The National Automatic Enrolment Retirement Savings Authority (NAERSA) has also recently published several FAQs on its website summarising the Standards. The Standards are effective from 1 January 2026.

What are the Standards?

For defined contribution (DC) pension schemes & PRSAs:

• Employer contributions must be at least €1,200 in any year or 1.5% of an employee’s gross pay, whichever is less; and
• Employee contributions, when aggregated with the employer contributions being paid, must be at least €2,800 or 3.5% of an employee’s gross pay, whichever is less.

For defined benefit (DB) pension schemes: The employee’s service must entitle the employee to accrue a long service benefit in the DB scheme. 

Supervisory approach

In a press release issued on 24 December 2025, the Minister announced the introduction of the Standards and reassured employers that the Standards are not intended to “cut-across any well established, well designed and well operating schemes” and “NAERSA’s focus will be on ensuring that any schemes claiming exemption from MyFutureFund comply with these standards, rather than on imposing penalties. This will involve assessing contribution levels over a three-month period which is also the basis for determining eligibility for MyFutureFund.”  The press release goes on to say that “Employers of any schemes where the contribution amount, over this [three-month] period, is less than the specified 3.5%, will be contacted with a view to assisting them to become compliant”. The Minister also made clear enforcement action will only be considered if employers do not engage or continue not to be compliant.  

Key takeaways for employers

1. Many established DC schemes and PRSAs where both employer and employee contributions are currently paid will satisfy the Standards. However, those with low contribution rates (e.g. 1% or 2% matching) and those that pay contributions based only on basic pay in circumstances where employees also have non-pensionable earnings (e.g. bonus/allowances/commission) should be reviewed and may need to be updated.

2. DB schemes where employees are accruing retirement benefits are likely to satisfy the Standards. NAERSA’s FAQs confirm that it is not requiring that any level of employer or employee contributions are paid to a DB scheme where an employee is accruing a retirement benefit, for that scheme to satisfy the Standards.  

3. The Minister’s press release provides some comfort to employers that they will have some time to update their schemes or PRSA arrangements to meet the Standards if they wish for employees to participate in those schemes or PRSAs instead of MyFutureFund. However, the content of the press release does not obviously line up with the Standards or the legislation in some important respects. In particular, the legislation and Standards do not expressly provide for a three-month lookback period in assessing if the Standards are satisfied.  It remains to be seen to what extent NAERSA will exercise discretion in assessing if the Standards are satisfied or if the approach will be that, unless the Standards are clearly satisfied based on Revenue payroll returns at each payroll date, the employee will be enrolled into MyFutureFund and the responsibility will then be on the employer to appeal the decision and seek a refund of MyFutureFund contributions paid.

4. Employers should consider their approach to any categories of employees where the contributions being paid are less than the Standards and consider cost implications associated with increasing contribution rates or basing contributions on gross pay rather than basic pay (where applicable). Aside from cost, employers will need to consider the practical issues (and challenges) that might be encountered in making changes now to any plan. In particular, changes to scheme documentation and employee communications/engagement may be required. In certain cases, contracts may need to be updated.

5. Employers may need to consider consulting with employees and trade unions on this matter, particularly if any specific actions are envisaged on foot of the Department’s comments or if industrial relations issues might be likely to arise.

Is there anything else employers should be aware of?

Two other sets of regulations have also recently been signed which set out the fees for MyFutureFund and give more detail on its operation.. For example, they provide for:

• circumstances in which contributions are to be repaid, including for overpayments or where employees are enrolled in MyFutureFund in error
• the information employers are required to provide to NAERSA, and the timing of providing that information
• information sharing between the Revenue and NAERSA
• handling system failures
• early payment of an employee’s MyFutureFund account for incapacity or ill-health
• fees
• fixed payment notices in the event of non-compliance by employers, including a fixed payment notice of €2,500 where an employer hinders access to MyFutureFund and a sliding scale for late or unpaid contributions depending on the amount of contributions unpaid, all of which must be paid within 21 days

How we can help

Our pensions and employment law specialists have been providing extensive advice to employers on preparing for MyFutureFund and how to respond to the latest developments.  

If you would like to find out more about how we can help you, please contact Chris Comerford, Pensions Partner, Michael Doyle, Employment Partner or your usual contact on the Employment or Pensions teams. 

Date published: 15 January 2026