I run a small agri-contracting business with four full-time staff who’ve been with me for years. I’ve heard auto-enrolment is coming soon and that employers like me will have to sign up. I’m not sure exactly what I’ll need to do, how much it’ll cost, or whether it’s the right option for my team? Could there be a better alternative, like setting up a pension scheme myself? I don’t want to get caught unprepared, and rush into something unsuitable.
Can you explain what’s changing, and what I should start thinking about now?
ANSWER: Auto-enrolment (AE) has been talked about for years, but it’s now officially on the way. From 1 January 2026, it will be mandatory for employers to enrol certain workers into a new State-backed pension scheme called My Future Fund, unless you’re already offering a qualifying alternative. It does not apply to self-employed individuals such as farmers. Let’s break down what that means.
Who will be affected?
Under AE, employees must be enrolled in the My Future Fund if they are:
Between 23 and 60 years old. Earning over €20,000 per year. Not already in a pension scheme.This happens automatically – they don’t need to request it. The idea is to make pension saving the standard, not the exception.
If an employee wants to opt out, they can – but only after six months. And even then, if they still qualify two years later, they’ll be automatically enrolled again. This recurring opt-in approach is designed to build a habit of saving for retirement.
What will it cost?
At the start, the required employer contribution is 1.5% of your employee’s gross salary. Your employee will also contribute 1.5%, and the State will add an extra 0.5%. But this isn’t a flat rate. The cost will gradually increase over a ten-year schedule.
Years 1-3: 1.5%. Years 4-6: 3%. Years 7-9: 4.5%.
- From Year 10 onwards: 6%.
So by year 10, you’ll be contributing 6% per eligible employee, and your employee will match that – plus the State will still add 2%. That means you need to plan for a gradual increase in cost, whether you stick with AE or choose an alternative.
Do you have other options?
Yes. You don’t have to go with AE if you already have – or are willing to create – a qualifying pension scheme. There are two main alternatives:
1. An Occupational Pension Scheme.
2. An Employer-Sponsored PRSA (Personal Retirement Savings Account).
But not just any setup will do. These alternatives must:
- Cover all employees who would otherwise qualify for AE.
- Be actively managed through payroll deductions.
- Match or exceed the AE employer contribution rates.
- Be compliant with Irish pension regulations.
It’s essential to check that any existing scheme ticks all those boxes, or it won’t exempt you from AE.
Why would you opt for an alternative?
There are several good reasons employers opt for private schemes over AE:
More control: with AE, you have no choice in the structure or provider. A private scheme allows you to choose the provider, the investments, and tailor it to suit your team’s needs.
Better flexibility: AE is a one-size-fits-all solution. Private schemes offer more varied investment options, plan types, and levels of governance. This can allow for more personalisation and potentially better long-term outcomes.
Enhanced staff benefits: a thoughtfully designed pension plan shows staff you value them. That can help with recruitment, retention, and morale.
Smoother payroll integration: if
you already run pension deductions through your payroll system, expanding your existing scheme may be less
hassle than introducing a new AE set-up.
In Short
Here are three important steps to take:
Check what you have: are you already offering a pension scheme? If so, review it closely to see if it meets AE exemption standards. Don’t assume – it has to meet every requirement to qualify.
Seek advice early: talk to a qualified pension adviser. They can explain your options clearly, compare costs and benefits, and help you decide between AE and private alternatives. Some businesses will find AE easiest; others may benefit more from a customised plan.
Budget ahead: even if you choose AE, costs will rise gradually. Start factoring this into your financial planning now to avoid any surprises later.
Martin Glennon, ifac
Martin Glennon is head of financial
planning at ifac, the professional
services firm for farming, food and
agribusiness.
I run a small agri-contracting business with four full-time staff who’ve been with me for years. I’ve heard auto-enrolment is coming soon and that employers like me will have to sign up. I’m not sure exactly what I’ll need to do, how much it’ll cost, or whether it’s the right option for my team? Could there be a better alternative, like setting up a pension scheme myself? I don’t want to get caught unprepared, and rush into something unsuitable.
Can you explain what’s changing, and what I should start thinking about now?
ANSWER: Auto-enrolment (AE) has been talked about for years, but it’s now officially on the way. From 1 January 2026, it will be mandatory for employers to enrol certain workers into a new State-backed pension scheme called My Future Fund, unless you’re already offering a qualifying alternative. It does not apply to self-employed individuals such as farmers. Let’s break down what that means.
Who will be affected?
Under AE, employees must be enrolled in the My Future Fund if they are:
Between 23 and 60 years old. Earning over €20,000 per year. Not already in a pension scheme.This happens automatically – they don’t need to request it. The idea is to make pension saving the standard, not the exception.
If an employee wants to opt out, they can – but only after six months. And even then, if they still qualify two years later, they’ll be automatically enrolled again. This recurring opt-in approach is designed to build a habit of saving for retirement.
What will it cost?
At the start, the required employer contribution is 1.5% of your employee’s gross salary. Your employee will also contribute 1.5%, and the State will add an extra 0.5%. But this isn’t a flat rate. The cost will gradually increase over a ten-year schedule.
Years 1-3: 1.5%. Years 4-6: 3%. Years 7-9: 4.5%.
- From Year 10 onwards: 6%.
So by year 10, you’ll be contributing 6% per eligible employee, and your employee will match that – plus the State will still add 2%. That means you need to plan for a gradual increase in cost, whether you stick with AE or choose an alternative.
Do you have other options?
Yes. You don’t have to go with AE if you already have – or are willing to create – a qualifying pension scheme. There are two main alternatives:
1. An Occupational Pension Scheme.
2. An Employer-Sponsored PRSA (Personal Retirement Savings Account).
But not just any setup will do. These alternatives must:
- Cover all employees who would otherwise qualify for AE.
- Be actively managed through payroll deductions.
- Match or exceed the AE employer contribution rates.
- Be compliant with Irish pension regulations.
It’s essential to check that any existing scheme ticks all those boxes, or it won’t exempt you from AE.
Why would you opt for an alternative?
There are several good reasons employers opt for private schemes over AE:
More control: with AE, you have no choice in the structure or provider. A private scheme allows you to choose the provider, the investments, and tailor it to suit your team’s needs.
Better flexibility: AE is a one-size-fits-all solution. Private schemes offer more varied investment options, plan types, and levels of governance. This can allow for more personalisation and potentially better long-term outcomes.
Enhanced staff benefits: a thoughtfully designed pension plan shows staff you value them. That can help with recruitment, retention, and morale.
Smoother payroll integration: if
you already run pension deductions through your payroll system, expanding your existing scheme may be less
hassle than introducing a new AE set-up.
In Short
Here are three important steps to take:
Check what you have: are you already offering a pension scheme? If so, review it closely to see if it meets AE exemption standards. Don’t assume – it has to meet every requirement to qualify.
Seek advice early: talk to a qualified pension adviser. They can explain your options clearly, compare costs and benefits, and help you decide between AE and private alternatives. Some businesses will find AE easiest; others may benefit more from a customised plan.
Budget ahead: even if you choose AE, costs will rise gradually. Start factoring this into your financial planning now to avoid any surprises later.
Martin Glennon, ifac
Martin Glennon is head of financial
planning at ifac, the professional
services firm for farming, food and
agribusiness.
SHARING OPTIONS