Three Quarters of Businesses Expect Auto Enrolment to Reduce Profits in 2026
A new nationwide survey suggests that most Irish businesses expect pension auto enrolment to place pressure on profitability once the scheme begins in 2026. The research, carried out by FRS Recruitment, indicates that many employers are planning price increases, recruitment freezes or reduced investment to manage the additional cost burden.
According to the study, the average employer faces an estimated 25,000 euro rise in employee related costs next year due to the rollout of the My Future Fund auto enrolment scheme. The survey had 515 respondents, split roughly evenly between employers and employees.
For workers, understanding the new system remains a challenge. Fifty nine percent of employee respondents said they need more guidance from their employer on how auto enrolment will operate and what it means for their retirement savings.
Colin Donnery, CEO of FRS Co Op, noted that while the scheme is designed to boost long term financial security for more than 800,000 workers, it also introduces cost pressures for businesses. Over three quarters of employers surveyed expect auto enrolment to reduce profitability in 2026. He added that it is unsurprising to see companies considering price rises or hiring pauses as they try to adjust.
My Future Fund will begin on 1 January. It will automatically enrol any eligible employee aged between 23 and 60 who earns over 20,000 euro annually and is not already contributing to an occupational pension. Contributions will be introduced gradually over a ten year period. Both employer and employee contributions will start at 1.5 percent and increase every three years until reaching 6 percent in year ten. The State will provide a top up of one euro for every three euro contributed by the employee.
The Government has emphasised that Ireland is the final OECD country to implement a national auto enrolment system. A new body, the National Automatic Enrolment Retirement Savings Authority, has been established to oversee the programme.
Minister for Social Protection Dara Calleary has said that administration for employers will be kept to a minimum. NAERSA will be responsible for identifying eligible employees, enrolling them, managing opt ins and opt outs, calculating contributions and informing employers of the amounts due through payroll.
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