We understand that the National Automatic Enrolment Retirement Savings Authority (NAERSA) has begun contacting employers where failure to meet the minimum standards for exemption from auto-enrolment has been identified.

In our previous article (available here), we considered the then newly introduced minimum standards and the immediate practical implications for employers. Employers contacted by NAERSA and at risk of having employees fall below the minimum standards need to consider how to best address that risk.

Understanding the Auto‑Enrolment Minimum Standards (the Standards)

To recap, if an employer already operates a workplace pension (pension scheme or PRSA), that arrangement must now meet the minimum standards set out below to exempt its employees from being auto-enrolled into MyFutureFund (MFF). For defined contribution (DC) schemes and PRSAs, the current minimum standards are:

• employer contributions must be at least €1,200 in any year or 1.5% of an employee’s gross pay, whichever is less; and
• aggregate contributions (combining employer and employee) must be at least €2,800 in any year or 3.5% of an employee’s gross pay, whichever is less.

For defined benefit (DB) pension schemes, the employee’s period of service must entitle them to accrue a long‑service benefit under the scheme rules.

The Regulatory Approach

The Standards took effect under legislation from 1 January 2026. However, NAERSA’s systems did not (at least initially) apply the Standards to eligibility testing. NAERSA explained their planned regulatory approach in FAQs as follows:

• to first use a 13-week look back period commencing from 1 January 2026 to review payroll data against the Standards; and
• then contact employers where contributions are below the minimum levels.

With the expiry of the 13‑week period, NAERSA has begun engaging with employers who have not satisfied the Standards. NAERSA are seeking clarification on the steps each employer proposes to take to bring their pension arrangements into compliance with the Standards.

Risk of Dual Payments

The potential risk facing employers is that they and their employees may be required to contribute to both the existing pension arrangements and MFF simultaneously (at least for a period).

NAERSA has indicated that it will engage with the relevant employer and provide an opportunity for them to rectify any shortfall against the Standards before issuing an Auto‑Enrolment Pension Notification (AEPN) for employees in the workplace pension.

Employers should therefore be mindful of the need for swift decision-making to avoid the risk of both them and their employees having to make overlapping pension contributions to MFF and existing pension arrangements.

Decision Time for Employers

Employers with workplace pensions where certain employees will fail (or are at risk of failing) the Standards are now faced with a decision regarding the future contribution structure of that arrangement. Some of the avenues open to employers include:

• uplifting employee and employer contribution levels to meet the Standards;
• uplifting employer contributions only (where the employer absorbs the cost); or
• reassessing if MFF is preferable for the business (having considered the impact of the Standards, including future likely increases).

Careful analysis of the potential advantages and risks of each avenue will be required, including employment law and employee relations risks.

Information for Exemption

For employers who uplift the workplace pension to meet the Standards, NAERSA has indicated that the following information will need to be provided when applying for an exemption:

• DC schemes and PRSAs: Scheme providers must supply contribution schedules detailing employee names, PPS numbers, gross pay, employer and employee contribution amounts, and the applicable reference periods.
• DB schemes: Employers must provide a formal attestation from the scheme trustee confirming that members continue to accrue long‑service benefits under the scheme rules.

Conclusion

Employers whose employees are at risk of failing the Standards are now faced with a decision on the future contribution structure of their pension arrangements. As such, they will need to make decisions swiftly to mitigate the risk of those employees being enrolled by NAERSA into MFF.  There are various options open to employers in dealing with the impact of the Standards. However, assessing these options, and the related legal risks, requires careful analysis. Therefore, employers should not delay in seeking the necessary advice to guide them through that process.

For further information or advice on the decisions facing your business in light of the impact of the Standards, please get in touch with a member of our Pensions team.

Contributed by Stephanie O’Gorman