Dara Calleary

Social protection minister Dara Calleary highlighted the new regulations in an update which noted that over 77,000 employers, responsible for around 645,000 employees, have registered on the MyFutureFund employer portal since its launch at the beginning of the month.

From 1 January, employees enrolled in MyFutureFund will benefit from being part of a high-quality retirement saving system.

Under MyFutureFund, every €3 saved by the employee will convert into €7 when their employer and State contributions are added.

These funds will then be invested on their behalf into well-regulated investment funds generating further returns and building up a retirement savings pot that will be available to the employee on their retirement.

Social protection minister Dara Calleary said: “The response to the launch of the MyFutureFund employer portal has been fantastic.

“Already, 77,000 employers with 645,000 staff have registered and contributions will start for these employees from pay-dates starting on the 1st January.

“This will give these employees, and the many others who we expect to see registered between now and January, access to a high-quality occupational retirement scheme, at low cost with the added flexibility to opt-out, suspend their savings for a period of time and to carry their retirement savings with them from job to job.”

The next stage in the rollout of MyFutureFund will be the opening of the employee portal on 1 January.

From mid-January, employees will be able to view their contributions and those of their employer and the State in their MyFutureFund account, when collected and processed by the National Auto-Enrolment Retirement Savings Authority (NAERSA).

Employees will also be able to select their preferred investment plan, monitor investment returns and exercise options to opt-out or suspend savings.

To coincide with the opening of the employee portal, Mr Calleary today signed a statutory instrument to give effect to exemption standards determined by NAERSA.

These standards, were developed following consultation with the Pensions Authority, set out the minimum contribution requirements that occupational pensions schemes must satisfy if participation in these schemes is to be used as the basis for claiming exemption from enrolment into MyFutureFund.

The standards ensure that pension arrangements outside of MyFutureFund are at least as favourable for the participating employee as they would be under the introductory contribution rates in MyFutureFund.

In the case of a defined contribution occupational pension scheme, the standards specify the total contributions amount to at least 3.5 per cent of the employee’s gross pay, subject to a maximum of €1,200, of which at least 1.5 per cent must be made by the employer to exempt an employment from enrolment in MyFutureFund.

For defined benefit schemes, the standards specify that those that confer a long-term benefit based on continuing employment, will allow such employments to be exempted.

Mr Calleary said: “The MyFutureFund scheme is intended to provide coverage to employees who are not already members of an employer sponsored occupational scheme — as is the case for many employees.

“We don’t want to cut-across any well established, well designed and well operating schemes. However, it is also important that such occupational schemes, if they are to be exempted, serve their purpose in allowing participants to accumulate sufficient retirement savings to fund a decent pension in retirement. That is why it is necessary to set exemption standards.

“To begin with, these standards are being set at a modest amount reflecting the phased introduction over a 10-year period of MyFutureFund, and the vast majority, if not all, pre-existing pension schemes will easily satisfy these standards.”

NAERSA’s focus will be on ensuring that any schemes claiming exemption from MyFutureFund comply with these standards, rather than on imposing penalties. This will involve assessing contribution levels over a three-month period which is also the basis for determining eligibility for MyFutureFund.

Employers of any schemes where the contribution amount, over this period, is less than the specified 3.5 per cent, will be contacted with a view to assisting them to become compliant.

However, if an employer scheme continues to fall below the standard with no evidence of the employer making appropriate efforts either to reach the exemption standard or to allow their staff to enrol in MyFutureFund, then the compliance powers available to NAERSA under Part 9 of the Automatic Enrolment Retirement Savings System Act 2024 will be enforced.

Mr Calleary said: “I don’t expect this situation to arise to any great extent. As the registration levels to date show, the overwhelming majority of employers are supportive of and welcome the introduction of MyFutureFund.

“They are well-aware of the experience of other countries such as Australia and the UK where the availability of a state-owned auto-enrolment option has been seen as a huge positive. For example it is not unusual for employers in those countries to promote the availability of the auto-enrolment option as a selling-point in recruitment campaigns.

“We have, however, learned that a very small number of employers have sought to enrol some employees, who were not previously participating in those occupational schemes, into these schemes with just a notional contribution.

“Even though this is a very small number it is not a practice that can be ignored as it, in effect, denies the employees concerned access to an effective retirement savings plan.

“The enactment of these regulations will reassure workers that they will, either through their company’s own occupational scheme or through MyFutureFund, have the ability to participate in a decent retirement savings scheme.”