With pension auto-enrolment due to be launched on 1 January 2026, employers are now in a critical phase of the preparations.
The importance of November’s payroll
One crucial detail to note at this point is how and when employees will be deemed eligible for My Future Fund, and what the cut-off point is for employers to enroll their staff in an occupational scheme instead, if they offer one.
To determine eligibility, the National Automatic Enrolment Retirement Savings Authority (NAERSA) will be looking at payroll data from the months preceding the commencement date of auto-enrolment (AE). This means that eligible employees who are not enrolled in an occupational pension scheme on November's payroll may automatically be enrolled in AE on 1 January 2026, even if they have since signed up for the occupational scheme.
In essence, if you would prefer that your employees take part in your company’s occupational scheme rather than auto-enrolment, time is running out.
Can I insist that my employees join the company pension plan?
It is crucial to note, however, that these decisions may depend on the specific details laid out in the employee’s employment contract.
The first step is to check each employee’s employment contract and determine whether they are obliged to join the company scheme, if there is one, or whether participation is optional.
Employers should ensure that if an employee is not contractually obliged to join the company scheme, they are not hindered in any way from participating in the Government’s auto-enrolment scheme should they wish to join.
Who is eligible for pension auto-enrolment?
Employees will be automatically enrolled in the new My Future Fund pension scheme if they are:
- Aged between 23 and 60 years old
- Earning €20,000 or more per year, and
- Not already contributing to an occupational pension scheme through their employer’s payroll system
Employees can choose to opt out of the scheme after six months, although they will be re-enrolled after a period of two years if they are still eligible.
What does this mean for employers?
If some employees are enrolled in My Future Fund, while others are enrolled in a company pension scheme, employers will have to manage both schemes concurrently.
From a payroll and documentation perspective, this could be complex. Businesses, and SMEs in particular, may struggle with the administrative burden of managing both schemes simultaneously.
From the employee’s perspective, depending on individual circumstances and the specific occupational scheme in place, they might prefer to be on the company scheme rather than the auto-enrolment scheme.
Either way, it’s important to communicate with your employees to ensure they fully understand their options before the end of November.
