Important developments in introduction of Auto-Enrolment

Auto-Enrolment to commence in September 2025

The Minister for Social Protection, Heather Humphreys, has signed a Commencement Order for the Automatic Enrolment Retirement Savings System Act 2024.
The Order designates 30 September 2025 as the official launch date for the new auto-enrolment system, which will be called My Future Fund. The National Automatic Enrolment Retirement Savings Authority (NAERSA), the supervisory body which will be responsible for overseeing the system, will be established with effect from 31 March 2025, leaving it with an ambitious six-month window to oversee the introduction of the various processes and arrangements necessary to support My Future Fund.

 

Auto-Enrolment provisions of the Finance Bill 2024

The Finance Bill 2024, which is shortly due to be signed into law by the President, also represents an important development for the introduction of My Future Fund.

The Bill includes a number of enabling provisions relating to the tax treatment of contributions paid to, and benefits drawn from, the new system. The key provisions confirm that:

• Employer contributions to My Future Fund will be allowed as a deductible expense for corporation tax purposes but any repayment of contributions to an employer will be taxed as a trade receipt;
  
  
• Employee contributions will not benefit from tax relief (with the State’s top-up contribution provided in lieu) but investment returns earned on funds within My Future Fund will be exempt from tax in the normal way;
  
  
• On retirement, participants will be permitted to take up to 25% of their accrued fund as a tax-free lump sum with any balance withdrawn thereafter being liable to income tax under the PAYE system;
  
  
• Any funds credited to a participant’s personal representatives on their death will also be subject to income tax; and
  
  
• Benefits accrued under My Future Fund will be included for Standard Fund Threshold purposes.

You can read our update on the wider pensions related provisions of the Finance Bill here.

 

What now for employers?

Clearly, a lot of work remains to be done to achieve the proposed launch date for My Future Fund, with NAERSA staffing and the tendering of investment management services for the system yet to kick off. However, having an official start date for the system will provide employers with a clear target date for finalising their plans.

It is imperative that employers who have yet to develop an AE action plan begin their preparations now in order to ensure that their business is ready to meet the new requirements when the system goes live in just under a year’s time.