My Future Fund Explained: A Plain-English Guide for Irish Employers

My Future Fund is Ireland’s new mandatory pension scheme that started on 1 January 2026. Every employer in Ireland regardless of size must now automatically enrol eligible employees, match their pension contributions, and process everything through payroll. If that sounds like a lot to get your head around, this guide breaks it down into plain English so you know exactly where you stand.

Why This Matters More Than Most New Legislation

Here is the honest truth about My Future Fund: most of the business owners I speak with heard about it, put it on the long finger, and are now scrambling to get their payroll sorted retrospectively.

That is understandable. Irish employers have had a lot land on their plates over the past few years rising minimum wage, increased PRSI rates, changes to sick pay rules. But My Future Fund is different. It is not optional. It applies from the first payroll of 2026, and contributions are owed from that date whether you have registered or not. Ignoring it does not pause the clock it just means you are building up a legal debt in the background.

The good news is that once you understand the structure, it is genuinely not that complicated to manage. Let me walk you through it.

What Exactly Is My Future Fund?

My Future Fund is the official brand name for Ireland’s auto-enrolment retirement savings system. It was introduced under the Automatic Enrolment Retirement Savings System Act 2024 and is run by a newly established government body called NAERSA — the National Automatic Enrolment Retirement Savings Authority.

The purpose of the scheme is straightforward. Before January 2026, Ireland was the only OECD country without a mandatory workplace pension system. Approximately 760,000 workers were saving nothing for retirement outside the State Pension. My Future Fund changes that by making pension saving the default employees are enrolled automatically and have to actively choose to leave, rather than actively choosing to join.

That distinction matters. When pension saving requires effort to start, most people never get around to it. When it requires effort to stop, most people stay in. This is the same principle behind the UK’s pension auto-enrolment system, which launched in 2012 and resulted in pension participation rising from around 55% to over 85% within a decade.

Who Administers My Future Fund and What Does That Mean for You?

NAERSA handles the heavy lifting. This is genuinely good news for employers, because it means you are not responsible for running a pension scheme, choosing investment managers, or managing individual employee pension pots.

Your role as an employer is much simpler:

• Ensure your payroll data with Revenue is accurate
• Process the correct contribution deductions on each payroll run
• Submit those contributions through the employer portal at myfuturefund.ie
• Notify enrolled employees as required

NAERSA then takes those contributions, pools them with State top-ups, and allocates them into individual employee accounts within 10 working days of each payday. The technology infrastructure behind the scheme is managed by Tata Consultancy Services (TCS), which handles the platform and processing systems.

For employers, this centralised administration model is significantly less burdensome than running a traditional group occupational pension scheme, where you would typically be responsible for scheme governance, trustee duties, and ongoing compliance with the Pensions Authority.

Which Employees Must You Enrol?

An employee must be automatically enrolled if they meet all three of the following conditions at the same time:

• They are aged between 23 and 60
• They earn €20,000 or more per year
• They are not already paying into a pension through payroll for that employment

That last point catches a lot of people out. If an employee is paying into a personal pension by direct debit from their bank account a PRSA or a retirement annuity contract they set up themselves that does not exempt them. Only pension contributions processed through payroll count. NAERSA checks Revenue’s payroll records to make that determination, so the information needs to be accurate at source.

For the earnings threshold, NAERSA uses a rolling 13-week lookback period. If an employee earns €5,000 or more during any 13-week window, they become eligible. This is particularly relevant for seasonal workers, commission-based staff, and employees returning from parental leave whose annualised salary crosses the threshold mid-year.

Part-time employees can also qualify. If someone works across two employments and earns over €20,000 in total, they are eligible for auto-enrolment in each employment that lacks a qualifying pension arrangement.

If you are running payroll for a mix of permanent staff, part-time workers, and contractors, it is worth doing a proper eligibility review before assuming anyone is exempt. We do this as part of our payroll services it takes far less time upfront than untangling contribution arrears later.

The Contribution Rates: What You Will Pay and When

The contribution structure is built around a simple three-way split between the employee, the employer, and the State. The rates are deliberately modest at the start and increase every three years.

All percentages are calculated on gross salary. Both employer contributions and State top-ups are capped at an annual salary of €80,000. Any portion of an employee’s salary above that threshold receives no employer match and no State contribution.

To put that in concrete terms: an employee earning €35,000 in 2026 will generate an employer contribution of €525 for the year. That same employee at the same salary in Year 10 will cost you €2,100 per year in pension contributions.

For a small business with, say, eight eligible employees each earning around €35,000, that is approximately €4,200 in total employer pension costs in 2026 rising to around €16,800 by 2035. Those are real costs that belong in your financial planning now, not as a surprise in four years’ time.

The employer’s contribution is a deductible business expense against corporation tax or income tax, which softens the impact somewhat. If you are not yet factoring pension costs into your annual accounts or cash flow forecasts, it is time to start our bookkeeping service can help you track these from the outset and flag increases as each phase kicks in.

How Employee Contributions Work: The “Net Pay” Detail

This is a point that genuinely confuses a lot of employers and employees, so it is worth being clear about it.

In a traditional occupational pension scheme, employee contributions are usually deducted from gross pay before income tax is calculated. This means a higher-rate taxpayer effectively gets 40% tax relief on their contributions.

My Future Fund works differently. Employee contributions are deducted from net pay after income tax, PRSI, and USC have already been taken. There is no upfront tax relief on the employee contribution. Instead, the State adds a 33% top-up directly to the pension pot.

In practice, for every €3 an employee puts in, the employer adds €3 and the State adds €1. That means every €3 of employee contribution becomes €7 in the pension account before any investment returns are added. For a standard-rate taxpayer, that 33% State top-up is actually more generous than the 20% tax relief they would get through a traditional scheme.

For higher-rate taxpayers, it is a different calculation. They would get 40% tax relief on contributions to a traditional pension, which is more valuable than the 33% State top-up. This is one reason why company directors and higher earners may want to look at maintaining or establishing a separate occupational pension arrangement rather than relying solely on My Future Fund. A proper look at the numbers is worth doing tax for company directors involves several interconnected decisions, and pension structure is one of them.

The Investment Funds: Where Does the Money Go?

Once contributions are in the My Future Fund system, employees choose how their pot is invested. There are four options:

Conservative fund lower-risk assets, suitable for employees close to retirement who want to protect what they have accumulated.

Moderate risk fund a balanced mix of assets, suitable for mid-career employees comfortable with some fluctuation.

Higher risk fund greater exposure to equities and growth assets, suitable for younger employees with a long investment horizon.

Default lifecycle strategy this is where employees land if they make no choice. It is an age-adjusted strategy managed by NAERSA’s appointed investment managers that automatically reduces risk exposure as the employee approaches retirement age. Most employees will end up here by default, which is a sensible safety net.

Investment managers are appointed by NAERSA through a formal public tender process. The fees charged for investment management under My Future Fund are structured to be significantly lower than typical retail pension products, which is one of the genuine advantages of the centralised scheme for lower earners.

The “Pot Follows the Member” Rule

One of the most practically useful features of My Future Fund for both employers and employees is how it handles job changes.

In a traditional occupational pension scheme, an employee who changes jobs often faces a complicated process of transferring their pension pot, or leaving it behind as a deferred benefit. The new employer may have a different scheme with different terms.

My Future Fund is different. The pension account belongs to the individual employee, not to the employer or the scheme. When an employee moves to a new job, their existing pot stays with them automatically. No transfers, no paperwork, no deferred benefit complications. NAERSA links contributions from multiple employments into the single account.

For employers, this means you are never responsible for managing an employee’s accumulated pension history. You simply process contributions for the period they work for you, and NAERSA does the rest.

What Happens When an Employee Wants to Leave the Scheme

Employees cannot opt out on day one. The scheme has a mandatory initial participation period of six months. After that:

Opt-out window (months 7 and 8): The employee can apply to leave through the MyFutureFund employee portal. They will receive a full refund of their own contributions from the six-month participation period. The employer contributions and State top-up from that period are not refunded — they remain invested in the employee’s pot. After opting out, the employee is automatically re-enrolled after two years if they are still eligible.

Suspension: After the first six months, an employee can also choose to suspend contributions rather than leave entirely. During a suspension (which can last one to two years), contributions from all three parties stop. The existing accumulated balance stays invested. When the suspension ends, the employee is automatically re-enrolled.

Each rate increase triggers a new opt-out window. When contributions increase every three years, employees get another two-month window to opt out of the additional increase. This is worth knowing because you will see a spike in opt-out requests in 2029, 2032, and 2035.

As an employer, you have no role in processing these requests everything is managed directly by the employee through their own MyFutureFund portal, accessed via their MyGovID account. What you cannot do is encourage, suggest, or facilitate an employee opting out. That is an offence under the 2024 Act and can be investigated by the Workplace Relations Commission (WRC).

Getting Your Payroll Software in Order

The practical mechanics of My Future Fund run through your payroll software. Most Irish payroll systems including BrightPay, Thesaurus Payroll, Sage Payroll, and Big Red Cloud updated their software for the January 2026 launch. If you are using any of these platforms, the My Future Fund functionality should already be available in your current version.

What the software handles: calculating the correct employee and employer contributions on each pay run, generating the submission file for NAERSA, and producing the required employee notifications.

What you still need to do manually: ensure your employee data is accurate, check that employees who should be enrolled are correctly flagged, and make sure anyone with an existing qualifying pension scheme is correctly excluded.

If your current payroll setup is not yet compliant or if you are running payroll manually on a spreadsheet, which a surprising number of small businesses still do this is the moment to fix that properly. Our payroll services handle all of this on your behalf, including NAERSA submissions, so you are not managing it alone.

What About Your Existing Pension Scheme?

If you already run a group occupational pension scheme or a group PRSA, you have three options going forward:

Option 1 — Stay with your existing scheme: If all your employees are paying into the existing scheme through payroll, they are exempt from My Future Fund. This is a clean outcome if your existing scheme has good employee coverage.

Option 2 — Run a dual arrangement: Employees already in your pension scheme stay there. Any employees with no scheme get enrolled in My Future Fund. You manage both simultaneously. This is the most common outcome for mid-sized businesses with mixed pension coverage.

Option 3 — Move everyone to My Future Fund: Wind down the existing scheme and migrate all employees. This simplifies things to a single system but requires careful legal and tax advice before proceeding  particularly if there are defined benefit obligations or employer-matched contributions in the existing scheme.

One thing to be aware of: from January 2026, the minimum total pension contribution for any arrangement is 3.5% of gross pay, with at least 1.5% from the employer. Any existing scheme that currently falls below these minimums needs to be updated.

If you run an existing occupational pension scheme and are unsure how it interacts with My Future Fund, that is a conversation worth having as part of your annual accounts review. We can help you map out the implications contact us for a free consultation.

Common Mistakes Employers Are Making Right Now

In talking to business owners and looking at how the rollout has gone in practice, a few patterns keep coming up:

Assuming all staff are already covered. Some employers assume their existing pension scheme covers everyone. When they check, they find that employees on probation, part-time staff, or workers who opted out of the group scheme years ago have no qualifying arrangement and are therefore eligible for My Future Fund.

Getting the eligibility calculation wrong. Using annual salary figures without checking NAERSA’s 13-week earnings lookback can result in employees being incorrectly excluded.

Not updating payroll software. Some businesses are still running older versions of payroll software that predate My Future Fund functionality. Contributions are being calculated manually which is error-prone and creates compliance risk.

Missing the employer portal registration. Around 85,000 employers had registered on the MyFutureFund employer portal by launch. If you are not yet registered, contributions are accruing from January 2026 regardless. The debt does not disappear it grows.

Frequently Asked Questions For Future Fund

Q1: Does My Future Fund apply to very small businesses even those with one or two employees? Yes. There is no size threshold. Any employer with at least one eligible employee regardless of whether they are a sole trader with one member of staff or a company with 500 people — has the same obligations under the Automatic Enrolment Retirement Savings System Act 2024.

Q2: Are employer contributions to My Future Fund taxable as a benefit-in-kind for the employee? No. The employer’s contribution to My Future Fund is exempt from benefit-in-kind tax for the employee. This is explicitly provided for in the Act. Employees do not pay income tax, PRSI, or USC on the employer’s contribution going into the fund.

Q3: What if an employee earns €20,000 or more across two part-time jobs? NAERSA assesses eligibility per employment. If an employee earns under €20,000 from each individual employer but over €20,000 in total, they are not automatically enrolled in either employment. However, they may voluntarily opt in to My Future Fund. This is a nuance that catches a lot of employers out eligibility is assessed per employment, not across all employments combined.

Q4: Can an employee be in My Future Fund and an occupational pension scheme at the same time? No. An employee paying into a qualifying pension scheme through payroll is exempt from My Future Fund for that employment. If their occupational pension contributions stop for example, if they leave the scheme or it is wound down NAERSA will identify them as eligible and enrol them automatically at the next assessment.

Q5: My employee is 61. Do I still need to enrol them? No. The upper age limit for auto-enrolment is 60. An employee aged 61 or over will not be automatically enrolled, even if they meet the income criteria and have no pension. They may choose to opt in voluntarily if they wish, but you have no obligation to enrol them.

The Bottom Line for Employers

My Future Fund is not going anywhere. The contribution rates will keep rising every three years until they reach 6% each from employer and employee by 2035. The earlier you get your payroll processes in order and your budgets updated, the less disruptive each increase will be.

The administrative burden is genuinely lighter than running a traditional occupational pension NAERSA handles the investment management, the employee accounts, and most of the administration. Your job is to get the payroll right and the contributions submitted on time.

If you are not sure where your business stands with My Future Fund compliance whether that is identifying eligible employees, checking whether your existing pension scheme qualifies, or just getting payroll software running correctly our payroll team can walk through it with you.

And if this is part of a wider question about restructuring how you pay yourself and your employees tax-efficiently, it is worth looking at the bigger picture for your business pension contributions, salary structure, and corporation tax all connect in ways that add up to real savings when they are planned properly.