Pension auto-enrolment to commence 30 September 2025
The long-awaited pension auto-enrolment scheme for workers is finally set to launch on 30 September 2025. This date was confirmed by Social Protection Minister Heather Humphreys as part of Budget 2025.
In the recent Budget, it was announced that Finance Bill 2024 will provide for the taxation of the Automatic Enrolment Retirement Savings Scheme (referred to as AE). According to the Budget publications, the tax treatment
“Aligns as much as possible with that of Personal Retirement Savings Accounts (PRSAs), other than for employee contributions.”
Under the scheme, employer contributions will qualify for tax relief. The growth in the AE funds will also be exempt from tax, and taxed upon drawdown, apart from a 25% tax-free lump sum.
The lump sum having a tax free threshold up to €200,000, will be taxed at 20% between €200,000 and €500,000 and taxed at 40% above €500,000.
It is important to note that while the State will make direct contributions for employees under the AE scheme, no tax relief will be available for employee contributions to AE.
If you have any questions or concerns about how the scheme will impact you or your business, please don’t hesitate to reach out to us here at EcovisDCA. We are here to help and provide you with the latest updates.
