Four defining forces are shaping the Irish pensions ecosystem in 2026: the launch of auto-enrolment (AE) on 1 January 2026, likely pension scheme authorisation, potential decumulation reform via the Pensions Authority’s ongoing work on in scheme drawdown (ISD), and continued post-IORP II consolidation and increased governance expectations.
Together, these shifts will expand coverage, increase pension costs for employers, intensify competition among Master Trusts, test operational resilience, and accelerate digital and data-led innovation.
But while the remainder of 2026 promises further change within the pensions landscape, it is equally vital for employers to look ahead to the challenges that lie ahead before the decade’s end.
Managing dual pension regimes with MyFutureFund and DC/Master Trust
Many employers will be navigating two parallel pension regimes for the foreseeable future: the State‑run MyFutureFund auto‑enrolment system and their existing DC or Master Trust arrangements. This dual structure introduces complexity on several fronts. Employers must ensure payroll systems can correctly identify eligible employees, apply the right contribution rules, and avoid duplication of benefits. At the same time, they will need to explain to employees why different cohorts may be treated differently depending on scheme eligibility, waiting periods, or contribution structures. The risk is that pensions become harder to communicate and administer, with employers acting as the “traffic controller” between two systems that were not designed to integrate seamlessly. Over the next four years, the challenge will be maintaining fairness, clarity, and operational accuracy while the new regime beds in.
Further contribution changes
The phased increases in minimum contributions – both under auto‑enrolment and within many employer DC schemes – will place upward pressure on employment costs. Employers will need to plan for rising contribution outlays at a time when wage inflation and broader cost pressures are already significant. This is not just a budgeting issue: contribution increases may also require employers to revisit their reward strategy, consider the competitiveness of their benefits package, and manage employee expectations. As contributions rise, employees may also become more sensitive to the value they receive, increasing the importance of clear communication and demonstrable scheme quality. Employers must strike a balance between affordability and maintaining a compelling benefits offering. As a result, employers may need to revisit their contribution design earlier than might have been expected.
Year | Employee Contribution | Employer Contribution | Government Contribution | Total Contribution |
1-3 | 1.5% | 1.5% | 0.5% | 3.5% |
4-6 | 3% | 3% | 1% | 7% |
7-9 | 4.5% | 4.5% | 1.5% | 10.5% |
10 + | 6% | 6% | 2% | 14% |
Focus on value for money
Value for money (VfM) is becoming a defining theme in Irish pensions. Employers will be expected to show that their scheme delivers good outcomes relative to its costs, governance standards, and service quality. This is particularly relevant as pension consolidation continues at pace and auto‑enrolment introduces a new benchmark for simplicity and cost transparency. Employers may face pressure to review provider arrangements, renegotiate fees, or consider alternative structures if their current scheme cannot demonstrate strong value. The challenge is that VfM is not just about cost – it encompasses investment performance, member engagement, retirement adequacy, and governance quality. Employers will need a more structured, evidence‑based approach to assessing and documenting value – especially as regulatory scrutiny intensifies.
Decumulation defaults and retirement journeys
The shift toward in‑scheme drawdown represents a major structural change in how retirement benefits are delivered. Employers sponsoring DC schemes or participating in Master Trusts will need to ensure their arrangements can support compliant, well‑governed drawdown pathways. This includes reviewing trustee readiness, ensuring appropriate investment strategies are in place, and confirming that members receive suitable guidance and communications as they approach retirement. For many employers, this will be the first time their pension arrangement plays an active role after retirement age, extending the employer’s governance and communication responsibilities. The challenge is to implement drawdown in a way that is operationally robust, member‑friendly, and aligned with regulatory expectations around retirement outcomes.
Operational resilience
The Pensions Authority has made it clear that operational resilience is now a core supervisory priority. Employers – particularly those with standalone schemes – must ensure that their pension arrangements can withstand service provider failures, cyber incidents, data breaches, and administrative errors. This requires stronger oversight of administrators, clearer contingency planning, and more rigorous documentation of processes and controls. As auto‑enrolment increases scheme membership and transaction volumes, the operational burden will grow. Employers will need to demonstrate that their pension arrangements are not only compliant, but also resilient, scalable, and capable of consistently delivering high‑quality member outcomes in a more demanding environment.
Employers should act now to modernise their pension governance, strengthen operations, and plan for rising costs so they can navigate dual regimes, regulatory change, and member expectations with confidence.
For leaders in organisations, it will be important to also focus on outcomes, not just compliance. Operational resilience will be expected, value for money should be demanded, and data should be used to truly personalise the employee experience.
To find out more on how we can support your business in 2026 and beyond, visit our People Solutions page (opens a new window) or contact your Lockton consultant.
