This month, many Irish businesses have seen auto-enrolment deductions begin appearing in their employees’ pay packets as My Future Fund rolled out across the State. For workers earning the average wage, this has meant roughly €15 a week being taken from take-home pay and a matching contribution from employers, plus a government top-up.
But now that the initial adjustment period is over, business owners are increasingly asking:
Is auto-enrolment really the best pension solution for our team and for our business?
For many companies, especially those with existing benefits packages or long-term employee retention goals, the answer may be:
No. There is a better way.
Why Auto-Enrolment May Not Be the Best Fit for Your Business
Auto-enrolment was designed with a specific purpose: to ensure that a broad swathe of workers begins saving for retirement who otherwise might not. But from a business perspective, it has some limitations:
1. One-Size-Fits-All Contributions
Auto-enrolment starts with a 1.5% contribution of gross pay, gradually rising to 6% by 2035. While helpful, this structure may not reflect your company’s compensation philosophy or the needs of higher-earning staff.
2. Limited Flexibility
There’s very little room for employers to tailor contributions, match rates differently, or incentivise high performers in the way that a company pension scheme can.
3. Engagement and Understanding
Many employees still don’t fully understand auto-enrolment pensions especially the value of employer and State contributions, meaning the incentive for long-term retirement saving may be weaker than intended.
4. Administrative Overhead
While auto-enrolment simplifies some aspects of compliance, it can also create extra reporting and payroll complexity, without delivering real engagement or strategic value.
A Better Alternative: Your Own Company Pension Scheme
If auto-enrolment isn’t giving you the value or flexibility your business needs, a bespoke company pension scheme can be a much stronger long-term solution.
Minimum Contributions
Since launch of My Future Fund a Statutory Instrument has been published by the Government setting out the minimum contributions to private pension arrangements for an employee to avoid AE enrolment.
– Employer contribution of at least 1.5% of total gross PAYE pay, to a maximum of €1,200 pa.
– Combined employer + employee contribution of at least 3.5% of total gross PAYE pay, to a maximum of €2,800 pa.
Here’s why a company pension scheme is a better alternative:
✔ More Competitive Benefits Package
Generous or well-structured pension offerings are a proven way to attract and retain talent especially in competitive labour markets.
✔ Structured Employer Contributions
You decide how much your company contributes, allowing you to:
Offer higher matching rates
– Reward loyalty
– Use contributions as part of executive or performance packages
✔ Greater Employee Engagement
With the right communication and planning, employees can see the real value of a company pension, not just a deduction on their payslip.
✔ Tax Efficiency
Company pension contributions often enjoy favourable tax treatment for both employers and staff, making them a cost-effective benefit.
Opting Out of Auto-Enrolment: What You Need to Know
Your business can choose to opt employees out of the auto-enrolment scheme.
How Our Company Can Help You Make the Transition
At Derradda Financial Services , we specialise in helping businesses:
✅ Evaluate auto-enrolment vs company pension schemes
✅ Design tailored pension solutions that fit your goals and budget
✅ Implement new schemes smoothly with employee buy-in
✅ Manage compliance, payroll integration and communications
✅ Offer full financial guidance to your team.
Whether you’re a small business looking to stand out with better benefits or a growing company seeking strategic pension structuring , we can guide you every step of the way.
Ready to Review Your Pension Strategy?
Auto-enrolment was a good starting point but it doesn’t have to be your end point.
Contact us today to find out how a bespoke company pension scheme could:
✨ Boost employee loyalty
✨ Strengthen your benefits offering
✨ Improve financial outcomes for you and your team
Your business deserves more than a standard deduction, it deserves a pension plan that works for everyone.
📞Call us: Dublin Office 01 2330209 / Galway Office 091 399256
📧 Email us: info@derradda.ie