Ireland's National Automatic Enrolment Retirement Savings Authority (NAERSA) has been urged to replace its proposed 13-week lookback assessment for occupational pension scheme exemptions from MyFutureFund with an overall scheme quality test, assessing the total value of benefits over a period of at least one year.

Irish Association of Pension Funds (IAPF) chief executive, Joyce Brennan, and Irish Institute of Pensions Management (IIPM) president, Aaron Gaynor, called for the change in a letter to NAERSA chief executive, Dermot Griffin, following a meeting they had where they initially raised the proposal.

The IAPF and IIPM argued that this would work better as minimum required contributions for exemption from MyFutureFund are expressed as a percentage of total earnings, but almost all pension schemes base contributions on basic salary.

Therefore, an employer with a low contribution rate that pays staff an annual bonus could fail the 13-week exemption test, even if the scheme has higher overall contributions than MyFutureFund.

“We recognise that this would require a legislative amendment and we request that NAERSA consider supporting a legislative change to ensure that pension scheme outcomes are the primary metric and that high-quality pension plans are not disadvantaged,” they wrote.

The two organisations also highlighted that several employers who created new contribution categories last year are finding that these will not meet the new standards and wish to remove these categories, allowing affected employees to be included in MyFutureFund.

"They have received mixed information regarding when employees can move into MyFutureFund, and we would welcome clarity on the appropriate process and timing," they stated.

Furthermore, the IAPF and IIPM requested that for any changes made to the rules and regulations, a consultation process be undertaken before any material changes are implemented. They reiterated that they “remain concerned” about the “accelerated introduction of minimum contributions” implemented at the end of 2025.

“We strongly support the principle that no employee should be enrolled in a pension arrangement that delivers less value than MyFutureFund. Actions by a minority of employers that resulted in unfair outcomes for employees need to be addressed. However, the absence of consultation and the lack of a reasonable notice period created significant and avoidable challenges for many employers that were acting in good faith,” they wrote.

Concerns were also raised about proposals under consideration to remove vesting periods for occupational pension schemes.

In Ireland, vesting periods allow employees to claim back pension contributions if they leave their place of work within two years of starting. Different schemes have different rules, but the maximum vesting period allowed is two years.

The IAPF and IIPM have warned that if vesting periods are prohibited, it could lead to “hundreds of thousands of very small, unclaimed pension pots in the system”.

Therefore, they recommended that any proposal to remove vesting periods be accompanied by a national pension tracing system, an efficient mechanism for consolidating very small pension pots and appropriate notice to allow employers to budget for this change.

European Pensions has contacted NAERSA for as response.

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