It’s make your mind up time for hundreds of thousands of employees who have been signed up to the My Future Fund national auto-enrolment pension scheme since the start of 2026. On January 1st, all employees aged between 23 and 60 earning more than €20,000 annually who were not already members of an occupational scheme or equivalent were automatically enrolled in the new scheme.
My Future Fund is what is known in the pensions industry as a “soft mandatory” pension scheme. Put simply, this means enrolment is mandatory, but people are able to opt out six months later. People enrolled since January 1st have a two-month window beginning on July 1st to opt out. They will get their own contributions back but those made by the Government and their employer will remain invested on their behalf.
It doesn’t end there, though: those who opt out will be automatically re-enrolled two years later and the process will start again. That cycle will continue until the individual concerned reaches their 60th birthday or decides to remain in My Future Fund, or else joins an occupational pension that meets certain standards.
The initial choice facing My Future Fund members in July is a binary one: stay in or opt out. Staying in might sound like the easy option, given that the scheme is only costing people 1.5 per cent of their salary at this stage – the employer matches that contribution, with the Government topping it up by a further one third of the employee contribution. Those contribution levels will rise to 6 per cent, 6 per cent and 2 per cent respectively over 10 years.
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While 1.5 per cent might not sound like a lot, it can be significant for someone who is struggling financially and finds themselves having to make trade-offs between electricity and groceries. Opting out will certainly be the easy option in those circumstances, but the hope would be that things might have changed sufficiently in two years’ time to allow people to re-enroll.
Some people may have more than just the opt-in-opt-out choice open to them – for instance, where their employer has an occupational scheme they can join on leaving My Future Fund. That will also apply to people joining companies with existing occupational schemes; in an increasing number of cases membership of such schemes is now mandatory for new employees anyway.
Where the choice still exists, either for current employees or new joiners, people need to decide which is best for them. It is worth noting that you can’t join both My Future Fund and a workplace pension scheme.
According to Ashling O’Neill, a certified financial planner with Clear Financial, the first thing to look at is the contribution levels. “The biggest thing to look at is the value of the employer contribution,” she says. “If the employer is matching your contribution up to 5 per cent or higher [in, for example, a company scheme], you could be losing out by choosing My Future Fund.”
The tax treatment is also important, she notes. “If you’re paying tax at the higher rate, it doesn’t make sense to be in My Future Fund where the Government contribution is lower than the tax relief you will get for occupational scheme contributions.”
PwC Ireland pensions partner Munro O’Dwyer agrees: “When contributions aren’t the same, employees are better off with the company scheme. People are getting more from their employer. Also, you don’t get tax relief on auto-enrolment contributions. A 5 per cent contribution to the company scheme is only costing you 3 per cent after tax relief if you’re paying at the 40 per cent rate. If that’s affordable for the individual, it’s a much better deal in terms of contributions going in.”
People still need to evaluate which arrangement is better for them, of course. “People will think about whether to pay less or more,” he says. “For some people, in the short term when money is tight the lower payment is best. There are two sides to it.”
There are other considerations, of course. Among these are the fees and costs associated with the two arrangements. O’Dwyer points out that My Future Fund has been designed to be as cost-efficient as possible. This also means that it is a no-frills option with none of the apps, calculator tools and advisory services which are features of many occupational schemes.
“The question is, if you are going to use the supports,” he points out. “But people do get comfort from having access to financial tools which help them to influence their retirement outcomes proactively. The great majority of large employers with over 250 employees tend to have very cost-competitive pension arrangements. The apps, the projection tools, the ability to get answers to questions and so on tend to be worth it.”
O’Neill also emphasises the value of advisory and other services provided through pension schemes. “Scheme members call me and text me with questions,” she says. “It’s all about giving people access to independent financial advice to help them make informed decisions.”
The company scheme may be the better option in most cases, but My Future Fund was not designed to compete with them; it’s there to increase pensions coverage, and all the signs are that it is succeeding in that objective.
