by Greta Siskauskaite, Solicitor, Employment law at Fieldfisher LLP (Ireland)
We are being told that Pension Auto-Enrolment (PAE) will (finally) come into effect on 30 September 2025.
PAE is a new State pension scheme which will automatically enrol eligible employees who are not already paying into a pension scheme. The PAE scheme will be operated by a new state agency (NAERSA) and will involve mandatory employer and employee – and some State – contributions.
With this 30 September 2025 deadline coming sharply into focus, affected employers need to consider what implications PAE will have on their organisation and pension arrangements. While some employers with long established and generous pension schemes may not notice any impact, employers who do not currently offer pension benefits will be impacted, Additionally, some employers are concerned about the potential impact of having to administer two parallel pension schemes.
Here are some key points employers should be considering in preparation for PAE.
- Do you already have pension arrangements in place for your employees?
An employee will be enrolled in the PAE scheme if they are between 23-60 and earn over €20,000 per year unless the employee is already participating in a qualifying pension scheme. The Automatic Enrolment Retirement Savings System Act 2024 (the “2024 Act”) provides that occupational pension schemes and other pension arrangements such as PRSAs, Trust RAC (retirement annuity contract) or PEPP (personal pension products) all meet the definition of a qualifying scheme once either the employer or employee is making contributions. Currently there are no further eligibility criteria for a qualifying pension scheme but this will change over time (further criteria will be drawn up and implemented around year 7 and more details on contribution rates will need to be considered at that stage). However, in the short term, if an employee is already participating in some form of pension arrangement, it is likely that this will be deemed a qualifying pension scheme, and its members will be exempt from PAE.
- How do you feel about having to potentially administer two parallel schemes?
Although a qualifying scheme will ensure its members will not be subject to PAE, you may still have a cohort of employees who are not members of your existing scheme and not contributing to any pension plan. An employer should quickly identify this cohort so that it can assess the potential administrative burden that PAE will bring. It would be worthwhile to assess whether the organisation is willing to take measures to ensure full pension coverage across the workforce, or alternatively whether you are prepared to administer dual pension schemes. It may be helpful to engage a pension broker who can advise on the potential administrative impact of auto-enrolment so that the organisation can make an informed decision.
- Consider mandatory pension membership for new employees
There is no service requirement for auto-enrolment, so if an employee joins and is not a member of a qualifying scheme from the outset, they will be subject to auto-enrolment. Therefore, if an employer is keen on avoiding administering the PAE in conjunction with its own pension scheme, then it might be worth making occupational pension membership a mandatory condition of employment for new employees.
- Begin efforts to convince all existing employees to become part of your occupational scheme
Whilst an employer can mandate pension membership for new employees, the position is more complex for existing employees. Mandating existing employees to join an existing occupational scheme is not necessarily straightforward and could potentially expose the employer to statutory claims such as potentially a Payment of Wages Act claim. As such, a more cautious approach might be to begin engaging with employees and attempt to convince them to join the organisation’s existing arrangements voluntarily. In this regard, it might involve consideration of the value of the organisation’s pension benefits to ensure that it marks an obvious improvement when compared with auto-enrolment.
- Monitor developments
This is a major departure in terms of mandatory pension coverage for employees in Ireland. As with all new schemes, trends and good practices will develop over time and affected employers should continue to keep an eye on issues arising before and during implementation and in the early years after commencement of the scheme.
As always, this Tip of the Week is high level and issued for information only and specific advice should always be taken before making any changes to your pension arrangements. As you would expect, the PAE scheme and the legal position around it is detailed and complex.
About the author
Greta Siskauskaite specialises in the area of employment law and advises on both contentious and non-contentious employment matters at Fieldfisher LLP (Ireland).
Greta provides both commercial and best practice advice to employers and employees on all matters relating to employment law. This includes bringing/defending claims to the Workplace Relations Commission/Labour Court, advice on contracts and employee handbooks, internal company procedures, discrimination, redundancy and TUPE.
Greta’s experience includes assisting both private and public sector clients.
Greta regularly attends Employment Law Seminars to ensure that she remains up to date on relevant legislative developments.
Greta hold’s a Bachelor of Business and Law Degree from NUIM and a Diploma in Employment Law from the Law Society of Ireland.
