Since January 2026, Ireland has had a nationwide auto-enrolment pension scheme, known as My Future Fund. It is designed to close a long-standing gap in retirement saving: with only around 35% of private sector employees previously saving for a pension, the government wants to see that figure rise to 70% and beyond.
For many employees, auto-enrolment is a genuinely useful first step towards retirement saving. But it is a basic, one-size-fits-all provision, and for high earners, it is not necessarily the right long-term choice.
This article is for high earners who want to understand how auto-enrolment affects them personally, and what alternatives might serve them better. If you’re a business owner wanting to understand your responsibilities under the scheme and how it affects you as an employer, our guide on the implications of auto-enrolment for business owners covers that instead.
Employees aged 23 to 60, earning €20,000 or more a year and not already in a qualifying pension scheme, are automatically enrolled into My Future Fund. If you are already contributing to a private, personal or occupational pension through payroll, you don’t need to worry – you will not be automatically enrolled for that employment.
Contributions are shared between employee, employer and the State, starting at 1.5% each from employee and employer plus a 0.5% State top-up, and rising in three-year steps to 6% each plus a 2% State top-up by year ten. However, contributions only apply to earnings up to €80,000 a year, and withdrawals are not permitted until the State retirement age, currently 66.
Employees can opt out after being enrolled for six months, within a two-month window, and receive a refund of their own contributions (employer and State amounts stay in the fund).
For the first cohort enrolled in January 2026, this window opened on 1 July 2026. Anyone who opts out is automatically re-enrolled every two years if they still meet the eligibility criteria.
For the full mechanics of the scheme, see our guide, My Future Fund: What to Know About Auto-Enrolment.
As a high earner, you want your money working as hard as possible, and the right pension vehicle can make a meaningful difference over a working lifetime.
The comparison below is general guidance, not personal advice, since the right choice always depends on your individual income, existing pension arrangements and goals. But for many high earners, a private or company pension offers real advantages over the State’s default scheme.
Auto-enrolment is only available to employees aged 23 to 60 earning at least €20,000. This automatically excludes several groups many high earners fall into: the self-employed, company directors who take income mainly through dividends rather than PAYE salary and anyone earning irregular or non-payroll income.
For these people, auto-enrolment isn’t an alternative at all – a private pension or PRSA is the only route to building a pension pot with tax-advantaged growth.
Auto-enrolment’s contribution rate is fixed by legislation, and earnings above €80,000 receive no employer or State match at all. A private or company pension has no such fixed cap.
A director who has had a strong year, for example, can make a significantly larger contribution than the auto-enrolment schedule would ever allow, subject to Revenue’s age-related percentage limits, accelerating retirement savings precisely when it is most affordable to do so.
Rather than traditional income tax relief, auto-enrolment’s State contribution acts as a flat top-up, worth roughly one euro for every three the employee contributes. This is broadly equivalent to a 25% relief rate. A standard-rate (20%) taxpayer sees a similar outcome either way.
But a higher-rate (40%) taxpayer loses out significantly: a €100 pension contribution through a private pension effectively costs €60 after tax relief, while the same €100 through auto-enrolment costs €75. Over a working lifetime, that gap compounds into a substantial difference in retirement savings.
Auto-enrolment offers a default lifecycle fund, which automatically reduces investment risk as you approach retirement, plus three additional risk-based options.
A private or company pension offers a far broader range of active and passive funds, and access to professional advice on how to align your pension strategy with your wider financial and estate planning, something auto-enrolment does not provide at all.
Auto-enrolment locks your funds away until the State retirement age of 66. Occupational and private pensions, by contrast, can often allow access from age 50, depending on scheme rules.
For high earners planning a business exit, a career change, or simply wanting more control over their own timeline, this flexibility can be just as valuable as the tax treatment.
Auto-enrolment does not allow additional voluntary contributions (AVCs), meaning your savings rate is fixed to the legislated schedule regardless of your circumstances.
Private and occupational pensions allow AVCs, giving you the ability to top up in a strong income year, or to catch up if you started saving for retirement later than you would have liked.
A company pension scheme can typically provide a death-in-service benefit of up to four times your salary, tax-free, in addition to a return of contributions, well beyond what auto-enrolment offers.
For high earners with dependants, this is a meaningful piece of financial protection that a default state scheme simply cannot replicate.
Auto-enrolment will serve many employees well, particularly those with no existing pension coverage. But for high earners, it is rarely the most efficient long-term option, and understanding exactly where the gaps lie takes more than a general comparison.
As a starting point, it’s worth taking a few concrete steps:
Auto-enrolment is a welcome step for broadening pension coverage across Ireland, but for high earners, it is not always the best strategy. At Fairstone, our pension advisers work with high earners and high-net-worth individuals across Ireland to build retirement plans that make full use of the tax relief, flexibility and investment choice available outside the default state scheme.
Book a no-obligation retirement planning consultation with Fairstone today, and make sure your pension strategy reflects your income, goals and ambitions, not just the state minimum.
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Disclaimer
This article is for general information purposes and is not an invitation to deal or address your specific requirements. Any expressions of opinions are subject to change without notice. The information disclosed should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future
