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The Department of Social Protection has issued a warning following reports that some employers are attempting to sidestep the new pension auto enrolment system by pressuring staff into joining less beneficial pension arrangements.

The national auto enrolment scheme, known as My Future Fund, is due to begin on 1 January and is expected to bring more than 800,000 workers into retirement saving for the first time. The scheme applies to employees aged 23 to 60 who earn more than €20,000 across their employments and who are not currently part of an occupational pension scheme.

My Future Fund will be phased in over a ten year period. Both employee and employer contributions will start at 1.5 percent and will rise in stages every three years until reaching 6 percent. The State will add one euro for every three euro contributed by the employee, providing a significant incentive to participate.

In correspondence to the Irish Congress of Trade Unions, the Secretary General of the Department noted that some employers have been urging staff to join pension schemes that require little from the employer. These schemes are reported to involve employer contributions of roughly 1 percent of salary, which the Department says is far below what would be provided under the new auto enrolment system and unlikely to result in any meaningful pension outcome.

ICTU General Secretary Owen Reidy welcomed plans for new regulations that will prevent employers from using minimal contributions to meet their legal obligations. He also encouraged workers who feel pressured into joining inferior schemes to seek advice from their trade union.

Similar concerns were highlighted by the Minister for Social Protection, Dara Calleary, who said a small number of employers are telling staff they must be enrolled in any pension scheme before January. He emphasised that employees without an existing workplace pension will be automatically enrolled in My Future Fund from 1 January 2026 and that workers should compare any pension they are offered with the terms of the new State scheme.

The Minister explained that the pension pot created under the new system belongs entirely to the employee and will move with them from job to job. He also highlighted the long term benefits, noting that a 25 year old earning €25,000 a year could accumulate almost €196,000 by age 66 before investment returns are taken into account.

The Government has said it is introducing safeguards to ensure the scheme cannot be diluted or bypassed. Once launched, the fund will be managed independently by NAERSA. A dedicated online portal is due to open on 1 December, allowing employers to register employees and enabling workers to monitor their own contributions and savings.

Ireland has been the only OECD country yet to implement auto enrolment, with hundreds of thousands of workers currently facing retirement with only the State pension. The Minister described My Future Fund as a major step towards providing greater financial security in later life.

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