Home Knowledge An Auto-Enrolment Easter Egg? Cabinet Approves AE Legislation

An Auto-Enrolment Easter Egg? Cabinet Approves AE Legislation

The introduction of the new pension Auto-Enrolment system (AE system) has been promised by successive Irish governments since the mid-2000s.

We understand significant progress has been made with cabinet approving draft legislation on Wednesday 27 March 2024.

At the time of writing, the Automatic Enrolment Retirement Savings System Bill (Bill) has yet to be published. However, the Department of Social Protection recently updated its FAQs on the topic which provides guidance on what might be expected in the Bill.

The FAQs state that once an employee is making some pension saving via payroll they will not be enrolled to the new AE system: “if you are contributing to your personal pension through payroll, you will not be eligible for the scheme.” The FAQs indicate that the Pensions Authority will develop standards for pension schemes to qualify for exemption from the AE system, but not until the level of contributions increases. This suggests that employees who are paying pension contributions (regardless of whether there is an employer contribution) will fall outside the scope of the AE system, at least in its initial stages.

It is understood that the Minister for Social Protection, Heather Humphreys, is seeking to have the Bill enacted as soon as possible so that the new AE system will be up and running by the start of 2025. With this timeline in mind, employers should begin considering what automatic enrolment will mean for their business and begin planning accordingly. In our article last year, we discussed the impact of the proposed new AE system on existing pension arrangements, and on the one scheme versus dual scheme approach, which may be adopted by employers. We await publication of the Bill to understand the proposals and which employee cohorts will fall outside the scope of the AE system.

For more information on how you should plan for AE’s introduction, please contact Ian Devlin, Ciara McLoughlin, Jane Barrett or your usual William Fry contact.


Contributed by Jane Barrett