THE LONG AWAITED pension auto-enrolment scheme for workers is set to kick in on 30 September 2025. 

Social Protection Minister Heather Humphreys made the announcement yesterday as part of Budget 2025. 

Speaking in the Dáil today Humphreys described the scheme as a “generational reform”. 

She also announced today that the Pay Related Benefit scheme, which will see workers who lose their job entitled to up to €450 or 60% of their salary, will kick in from 31 March 2025.

“This week, I will sign the commencement orders to ensure that there can be no going back and they will become a reality in 2025,” Humphreys told the Dáil. 

When asked about the delay with the scheme by The Journal during a press conference yesterday, Humphreys said: “We’re giving businesses a year lead in time, because there have been concerns about further expenses on businesses.”

How will auto-enrolment work? 

The scheme will apply to almost 800,000 workers between the age of 23 and 60 who are employed but not enrolled in an occupational pension scheme, and drawdown will be aligned with the State Pension.

The landmark scheme is being targeted to this cohort to allow them to begin saving for their pension earlier and to ensure that people are not left on just the State pension when they retire.

The scheme will see employees contribute into the pension pot, with their contributions matched by their employer, as well as a further top-up from the State.

So, if an employee were to pay in €3 to their pension pot, their employer must match their contribution and put in €3, while the State provides a €1 top-up.

For every €3 an employee puts in, they will end up with €7 in their pension pot.

All employees who are not already in an occupational pension scheme, and are aged between 23 and 60 and earning over €20,000 across all of their employments, will be automatically enrolled under the new legislation.

It will be possible for workers to opt out of the scheme if they wish or to suspend their contributions, after six-months mandatory participation.

Where a worker opts-out or suspends their contributions, they will be automatically re-enrolled after two years, after which they may opt-out or suspend again after a further six-months mandatory participation.

The scheme will be gradually phased in over the course of a decade.

Employer and employee contributions will start at 1.5% of gross salary for years 1-3, and rise to 3% in years 3-6, to 4.5% in years 6-9, and to the maximum contribution rate of 6% from year 10 onwards.

With reporting from Diarmuid Pepper.