Ireland Pensions Update
Pensions Update Summer 2025
As pensions continue to be a topical subject for stakeholders in 2025, we have set out below some recent developments which trustees, sponsors and members should be aware of. For further information in relation to any of these matters, please contact your Mercer Consultant.
Industry Developments
Auto-enrolment (AE)
The Automatic Enrolment Retirement Savings System Act, 2024 was signed into law on 9 July 2024 and it was intended that the Auto Enrolment (AE) retirement savings scheme named “My Future Fund” would come into effect from 30 September 2025. However, the government has now confirmed that the collection of contributions for the auto-enrolment system will being from 1 January 2026.
What does this mean for employers?
Despite the timeline being delayed, employers should still be working to plan for auto-enrolment. Employers will need to understand what AE will mean for them, including the potential operational challenges, cost implications over time and how their current pension scheme could be affected. Undertaking a high-level gap and cost analysis will provide an important indication of what employers can expect. Employers should also prioritise engagement with employees.
What does this mean for trustees?
Trustees will need to communicate with the sponsoring employer to request information as to whether there will be any likely implications and impacts on the scheme following the review and decisions undertaken by the employer.
For further information on auto-enrolment, click here
Mercer can support employers to understand the implications of AE on their business with a checklist of items for employers to consider. Please contact us for further information.
Review of the Standard Fund Threshold (SFT) Regime
The SFT is the limit on the total capital value of tax-relieved pension benefits that an individual can draw down in his or her lifetime from all of that individual’s pension arrangements. Changes to the SFT were announced in September 2024 following the publication of an independent review of the SFT and these changes were included in the Finance Act 2024.
For further information on the changes to the SFT please refer to the Standard Fund Threshold.
What should employers do now?
Employers should review whether their employees may be affected by this change and what steps will need to be considered. For example, an option may be to permit the employees previously impacted by SFT limits to rejoin the company pension plan.
Mercer can support employers to understand the implications of the changes to SFT. Please contact us for further information.
What should trustees do now?
Trustees do not need to take immediate action but should be aware of the scheme rules in relation to eligibility provisions.
The Pensions Authority issued a report in April 2025 sharing observations from their supervisory activities in 2024 which ranged from the Supervisory Review Process with Master Trusts and larger DB/DC schemes to compliance audits of DB and DC schemes.
The Supervisory Review Process assesses governance, risks and trustees’ risk management capabilities. The Pensions Authority reviewed six master trusts and two large schemes (one defined contribution and one defined benefit).
The Pensions Authority noted that trustees are expected to focus on enhancing governance practices, ensure compliance with regulatory requirements and ultimately protect the interests of scheme members. Some of the key areas identified by the Pensions Authority related to conflicts of interest, decision making, maintaining comprehensive minutes and policies tailored to the specifics of the scheme, establishing oversight frameworks for robust governance and ensuring that member engagement policies are detailed and go beyond statutory obligations.
The Pensions Authority also highlighted value for money, investment, internal audit and fit and proper standards for trustees as areas that trustees should focus on.
What should trustees do now?
Trustees should engage with their scheme secretary/governance consultant to review the key areas and develop a plan to address any potential gaps.
Mercer can assist trustees in relation to the new regulatory supervision. Please contact us for further information.
Legislation
The Employment (Contractual Retirement Ages) Bill 2025
The Bill published on 1 April 2025 gives effect to the recommendation by the Pensions Commission to allow employees, who wish to do so, to work beyond their contractual retirement age and continue to work to the State Pensions Age (SPA) of age 66.
Employees, who want to keep working up to SPA, can notify their employer that they do not consent to retiring at their contractual retirement age where this is below the SPA.
Employers will need to cede to such requests unless they can demonstrate an objectively justifiable legitimate aim and the means of achieving that aim are appropriate and necessary.
The Bill will now commence its way through the Houses of the Oireachtas and it is expected that once enacted, employers will see an increase in interest in their workforce for longer working.
What should employers do now?
Longer working and flexible retirement can give rise to various legal and practical issues for employers including considering employment contractual provisions, staff policies and benefits matters as well as potential changes to the rules of the pension plan. As a first step, Employers may wish to review what the rules of the pension plan provides for employees.
What should trustees do now?
Where pension schemes have a “Normal Retirement Age” less than 66, the Bill (if enacted) will not require an amendment to the Scheme rules. However trustees may wish to review the provisions in their rules dealing with late retirement.
Mercer can support employers and trustees in reviewing the provisions of the pension scheme and assist with any retirement policies that the employer and/or trustees may wish to consider implementing. Please contact us for further information.
Digital Operational Resilience Act (DORA)
DORA was adopted by the European Parliament and is effective from 17 January 2025. It applies to all “financial institutions,” which includes occupational pension schemes with 15 or more members.
The Pensions Authority have a dedicated page on their website which includes an FAQ and guidance to Trustees
The main requirements for trustees will include:
- Documenting and maintaining a comprehensive ICT risk management framework to include ICT business continuity plans and other policies and controls, as part of the overall risk management system.
- Identifying all sources of ICT risk and cyber threats on a continuous basis together with ongoing monitoring of the security and functioning of ICT systems relied on.
- Effective management of ICT third-party risk ensuring that key contractual provisions are in place with service providers as set out in article 30 of DORA.
- Maintaining a register of information on all contractual arrangements on the use of ICT services provided by third-party providers
- Managing and reporting major ICT related incidents to the Pensions Authority and keeping a record of significant cyber threats.
- Testing ICT systems supporting critical or important functions at least yearly.
The Pensions Authority has noted that “Trustees will bear ultimate responsibility for ensuring their schemes’ compliance with the requirements, irrespective any outsourcing arrangements in place.” The Pensions Authority also noted that “Almost every Irish pension scheme outsources its administration, and trustees must ensure that their administrator’s systems are reliable, efficient and robust, and provided them with all the information they need to meet their management and governance obligations.”
What should trustees do now?
Trustees should ensure that they have completed training in relation to their DORA obligations, that their necessary policies are adopted, that the service providers to whom DORA relates have been identified and that any contract provisions relating to DORA have been agreed. Trustees will also need to ensure measures have been put in place to implement and maintain digital operational resilience testing and incident reporting. Trustees will also need to prepare register of information (ROI) for their pension scheme which will need to be made available to the Pensions Authority on request.
Mercer can support trustees to implement a plan for DORA compliance. Please contact us for further information.
IORP II
Governance
As trustees enter Q2, they will be required to complete the triennial review of trustee policies under the Code of Practice for Trustees, i.e. since the implementation of IORP II in March 2022. Trustees in carrying out these reviews should be cognisant of the Pensions Authority’s expectation that policies should be tailored to the individual schemes.
Trustees will also be conscious of their fit and proper requirements under the Code of Practice for Trustees and their obligation to complete trustee training every two years since their appointment. With the introduction of DORA, supervisory review process with the Pensions Authority, governance obligations under IORPs II and general trustee duties and obligations, trustees may wish to review their knowledge levels and decide on topics for training in the second half of this year.
The Code of Practice for Trustees requires trustees to appoint a scheme secretary. Appointing a scheme secretary to prepare a business plan, run meetings, manage stakeholders and trustee actions as well as ensuring governance obligations are being met can greatly assist trustees in keeping on top of their governance requirements and allows the trustees focus on the strategic items and most importantly, best member outcomes.
Mercer can support trustees with their scheme secretarial services. For further information on Mercer’s secretarial scheme service see Mercer’s Scheme Secretarial Service
Mercer can also support trustees with a range of trustee training topics. Please contact us for further information.