PeoplePay’s Philip Keeler breaks down what’s changing and how you can smoothly navigate the transition.
The Irish pension system is poised for significant reform, driven by the need to ensure its sustainability and responsiveness to demographic trends, such as an ageing population. Central to these reforms are the introduction of an auto-enrolment system, revisions to the State Pension age, and modifications to contribution requirements.
Let’s look in more depth at the changes to the Irish pension system. Scheduled for implementation in September 2025, the auto-enrolment system is a substantial reform aimed at bolstering private retirement savings. This system will automatically enrol workers who lack a private pension, with contributions made by the employee, employer, and the government.
Another major revision involves the planned increment in the State Pension age, which has sparked considerable debate. Initially intended to rise to 67 in 2021, this increment was deferred following widespread public opposition. A new pensions commission was assigned to review the appropriate retirement age due to longer life expectancy. Although the commission’s insights may prompt future age increases, any adjustments will be made with a thorough consideration of their social and economic effects.
The eligibility criteria for the full State Pension (Contributory) are being recalibrated. Qualification requires a minimum number of social insurance contributions accrued throughout one’s working life. Proposed reforms aim to adopt a ‘total contributions approach’, accounting for all contributions made during an individual’s career, thereby aligning pension entitlements more closely with a person’s contribution history.
These modifications are a shift toward a more sustainable, career-averaged system designed to deliver fair and equitable pensions. Nevertheless, these changes also pose challenges, particularly concerning public acceptance and the financial implications for employees and employers. Given the pressures of an ageing demographic—a common challenge globally—these reforms are being brought in for the long-term viability of Ireland’s pension system, ensuring it remains robust and adaptable to evolving demographic and economic conditions.
Whether you’re expanding into Ireland or are already established there, PeoplePay Global is here to guide you through the complexities of placing someone in Ireland and ensuring you comply with the challenges of the changing pension system.
Contact us today to discover how outsourcing your payroll to us can help you continue growing your business.
Read more on our Ireland Payroll Page