Charities have warned that budgets for essential services will be affected by new auto-enrolment pension rules beginning January 1, 2026. The scheme will automatically enroll workers aged 23 to 60 earning over €20,000 who lack pension coverage into the government’s retirement savings program.
Under the new rules, pension contributions will be automatically deducted from salaries, with employers required to match these contributions and the State providing a top-up. However, Section 38 and 39 charities, which rely heavily on State funding, say these obligations could reach hundreds of thousands of euro and threaten service delivery.
A joint paper by the Disability Federation of Ireland and the National Disability Services Association warns that funding is essential to meet the sector’s pension obligations. The report found an average of 36 employees per organization will become eligible for auto-enrolment, with one larger organization facing enrollment of nearly 700 staff members.
One large employer estimates their 2026 budget will be hit by approximately €1.3 million in additional costs, with expenses rising as employer contributions increase. The paper argues the disability voluntary sector cannot implement auto-enrolment without dedicated funding, noting these are government-mandated requirements for organizations delivering State services with no commercial means to generate additional income.
A Rehab spokesperson told the Irish Examiner the organization will not cut services due to auto-enrolment but emphasized that funders must recognize these new, unavoidable costs and provide appropriate funding adjustments to maintain service levels nationally. Enable Ireland said its funders are aware of the challenges and it will seek solutions to address funding deficits.
The Department of Social Protection confirmed MyFutureFund applies to all organizations, public and private, regardless of size or structure. Compliance is a legal obligation requiring all eligible employees to be enrolled with accurate, timely contributions. The department stated that allocations to Section 38 and 39 companies are matters between these organizations and their respective funding bodies.
The HSE, which funds numerous voluntary organizations, said it will gather data in coming months, noting that many Section 38 staff are considered public servants typically already enrolled in occupational pension schemes, while many Section 39 staff already participate in such schemes or have personal pensions through payroll deductions.