What auto-enrolment scheme means for employees
- auto-enrolment scheme is a semi-mandatory retirement savings system designed to give employees extra income in retirement
- every €3 an employee contributes will be matched by their employer, and the state will top up with a further €1
- employees who are enrolled will have to stay in the system for six months, but they will be free to opt out in months 7 and 8 if they so wish
- in the first ten years, employees will also be able to opt out in months 7 and 8 after each contribution rate increase
- employees will also be able to suspend or pause their contributions at any time outside of the mandatory six-month participation period
- all contributions – from the employee, the employer and the state – will cease when an employee opts out or suspends their contributions
- employees who opt out or suspend their contributions will be automatically re-enrolled after two years, once they are still eligible for the scheme
How much will it cost
- employee contributions will start at 1.5% of gross pay
- in year 4 they will increase to 3%
- in year 7 they will increase to 4.5%
- in year 10 they will increase to the maximum rate of 6%
- all employee contributions will be matched by their employers and topped up by the State
- contributions will be fixed and employees won’t be able to contribute less or more than the set rate
Contributions are set as a percentage of your salary. You can’t make additional contributions. If you want to contribute more to your retirement savings then you should set up a private pension such as a PRSA
