Dáil Éireann Debate, Wednesday - 25 June 2025
128. Deputy Catherine Connolly asked the Minister for Social Protection if employer contributions to auto enrolment pension accounts will be exempt from PRSI; and if he will make a statement on the matter. [34669/25]
View answerThe Programme for Government contains a commitment to introduce the Automatic Enrolment (AE) Retirement Savings System. The legislative basis for implementing the new system was enacted last July. The aim of introducing AE is to address the pension coverage gap that exists in Ireland and to provide workers with greater comfort and security regarding their retirement savings. I recently announced the system, to be known by its brand name, 'My Future Fund', will commence from 1st January 2026.
Contributions into the retirement savings system will be made by the employee, the employer and the State. Calculated on the basis of the employee’s gross earnings, employee contributions will start at 1.5% for Years 1 to 3, to be matched by their employer. This will rise to 3% each in Years 4 to 6, and to 4.5% each in Years 7 to 9. From Year 10 onwards the maximum contribution rate of 6% from the employer and 6% from the employee will be applied. A direct State top-up will be contributed to participants' funds at the rate of €1 for every €3 the employee contributes.
Auto-enrolment contributions are calculated on the basis of the employee's gross pay and are deducted from the employee's net pay. Employer contributions to their employees' My Future Fund accounts are not treated as reckonable earnings for social insurance purposes and are therefore exempt from PRSI.
I hope this clarifies the matter for the Deputy.
