Automatic Enrolment Retirement Savings System: Minimum contribution standards

We have previously shared updates on the development of this system which are available here and here. We also indicated the potential introduction of the Regulations in our latest article.

On 24 December 2025, Minister for Social Protection, Dara Calleary, announced that new minimum contribution standards have been introduced for exemption from MFF.

To coincide with the launch of the MFF employee portal, Minister Calleary signed a statutory instrument giving effect to certain minimum exemption standards. These standards set the minimum contribution requirements for occupational pension schemes to qualify for exemption from auto enrolment:

• Defined Contribution Schemes: Must provide combined total employer and employee contributions of at least 3.5% of the employee’s gross pay or €2,800 per year (whichever is less), with a minimum employer contribution of at least 1.5% of the employee’s gross pay or €1,200 per year (whichever is less. The same minimum standards apply to PRSAs. 
• Defined Benefit Schemes: Must confer a long service benefit based on continuing employment.

The standards are designed to ensure that pension arrangements outside MFF are at least as favourable as the introductory contribution rates under MFF.  

In the most recent government press release, it was confirmed that National Automatic Enrolment Retirement Savings Authority (NAERSA) will initially focus on supporting compliance rather than penalising employers. Contribution levels will be assessed over the next three months to account for seasonal impacts, overtime, and commission. Employers whose schemes fall below the 3.5% threshold will be contacted with a view to assisting them to become compliant. 

Furthermore, from a review of the recently amended employer FAQs on the MFF website, it appears that employers will be required to apply for an exemption from the application of auto-enrolment to their employees – exemption is not automatically applied. The FAQs provide that employers will be required to demonstrate that their pension schemes meet the prescribed minimum standards.  

These minimum standards may now result in a situation whereby employers are contributing to an existing pension arrangement below the threshold and employees will be enrolled in MFF. This may result in the employer making contributions in accordance with MFF while also contributing to the existing pension arrangement. Employers must review existing pension arrangements to ensure:

• No minimum service or employment status restrictions that would exclude employees covered by auto-enrolment;
• Contribution levels are compliant with exemption standards; and
• Benefits are at least as favourable as those under MFF.

Employers should also review whether they have made any recent changes to their pension arrangement in particular, whether they have begun contributing to a pension arrangement on behalf of employees and such contribution now falls below the minimum standards. Employers might consider an increase in contributions to meet the minimum standards, but this should be considered with their pension providers and advice should be sought in respect of any contractual rights arising from an employment perspective

Sanctions for non-compliance range from compliance notices to fines of up to €50,000- or three-years’ imprisonment. The Workplace Relations Commission (WRC) can address claims of hindering or penalising employees for participating in auto-enrolment, with potential awards of up to four weeks’ remuneration and public reporting.

The introduction of the Act and the Regulations impose significant new obligations on employers in Ireland. From 1 January 2026, employers must ensure that all eligible employees are either enrolled in MFF or in a qualifying occupational pension scheme that meets the new exemption standards. 

Employers must act quickly to:

• Review and, if necessary, update existing pension arrangements to meet the minimum contribution requirements (at least 3.5% of gross pay (or €2,800, whichever is lower), with a minimum employer contribution of 1.5% (or €1,200, whichever is lower) for defined contribution or PRSA schemes); and 
• Register with the MFF employer portal to submit required information and manage contributions.

Immediate action is essential to ensure compliance and avoid enforcement actions, fines or other penalties.