Auto enrolment: employee opt-out or suspension window opens 1 July 2026

As the scheme reaches its first key milestone, employers should now prepare for the initial employee opt-out windows, which will commence on 1 July 2026, based on the statutory six-month minimum participation period.

Opting out

Under automatic enrolment:

• Employees must remain in the scheme for at least 6 months after enrolment.
• After this period, a 2-month opt-out window applies (months 6 to 8).
• For employees enrolled on 1 January 2026, this window runs from 1 July to 31 August 2026.

Where an employee opts out within this window:

• Their own contributions are refunded.
• Employer and State contributions remain invested in the fund for the employee.

Once an employee has been in the scheme for more than 8 months:

• The option to opt out is no longer available.

Employees who opt out will generally be automatically re-enrolled after two years, provided they remain eligible.

Suspension of contributions

After completing the initial 6-month participation period, employees may suspend their contributions at any time

During a period of suspension:

• Employee, employer and State contributions all stop.
• Existing funds remain invested in the employee’s account.

Where contributions are suspended, they may be restarted at a later date, subject to scheme rules on recommencement following a suspension.

Practical implications for employers

Payroll and operational readiness

The onset of the opt-out window introduces new administrative requirements for employers:

• Processing refunds of employee contributions.
• Ensuring alignment between payroll records and NAERSA reporting.
• Stopping contributions within the correct payroll cycle.

Auto-enrolment has already been identified as creating material payroll and compliance complexity, particularly for SMEs.

Compliance considerations

Employers should note that:

• It is an offence under the legislation to hinder or attempt to hinder an employee from participating in the scheme.
• Communications should be strictly factual and neutral.

Appropriate governance over internal and external communications will be essential during this phase.

Recommended Actions

Employers are advised to take the following steps:

Review payroll capability

• Confirm systems can identify employees entering the 6–8 month opt-out window.
• Ensure functionality to process refunds and cease contributions accurately.

Prepare internal guidance

• Equip HR and payroll teams with clear, consistent messaging.
• Ensure teams understand the timing and operation of employee options under the scheme.

Plan employee communications

• Provide accurate information on rights and options.
• Avoid any language that could be interpreted as advice or encouragement.

The opening of the first opt-out windows represents an important transition point in the operation of Ireland’s auto-enrolment regime. Early and proactive preparation will be critical to ensure compliance, minimise disruption and support employees effectively during this phase.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Forvis Mazars Global Mobility and Employment Tax team below: