ETF etf.ie

My Future Fund, and whether a PRSA would serve you better

Auto-enrolment does not give you tax relief. The Department of Social Protection is direct about it: instead of relief, the State adds €1 for every €3 you pay in. That is worth roughly 25%, so a higher-rate taxpayer gets less than the 40% a PRSA would return. And yet auto-enrolment is still the right answer for most people it captures, because of a number that has nothing to do with tax.

Scheme facts from gov.ie, last updated 14 January 2026. Verified 4 August 2026.

Not financial advice. The information on etf.ie is for educational purposes only and does not constitute financial, tax, or investment advice. ETF investing involves risk, including the possible loss of capital. Tax rules may change — always verify current Revenue guidance and consult a qualified financial adviser or tax professional before making investment decisions.

What goes in, and when

Contributions phase in over ten years. Both you and your employer start at 1.5% of gross pay and step up every three years until you each reach 6%, with the State adding a third of your share throughout.

Period You Employer State Total
Year 1 to 3 1.5% 1.5% 0.5% 3.5%
Year 4 to 6 3% 3% 1% 7%
Year 7 to 9 4.5% 4.5% 1.5% 10.5%
Year 10+ 6% 6% 2% 14%

Source: Department of Social Protection, gov.ie. Contributions are not levied on gross pay above €80,000.

Two constraints follow from that table and both matter. The rates are fixed: gov.ie states plainly that it is not possible for you or your employer to pay more or less. And 1.5% each does not build a pension. On €40,000 of salary that is €600 a year from you in the early years. Auto-enrolment is a floor, not a plan.

The State top-up is not tax relief, and it is worth less

This is where most coverage of the scheme goes vague. The Department's wording is not vague:

"Instead of tax relief on your contributions, the State will provide a top-up contribution at a rate of €1 for every €3 you pay in."

Put €3 in, the State adds €1. That is a 33% uplift on your money, equivalent to about 25% of the resulting €4 total. Compare that with a PRSA, where a contribution attracts relief at your marginal rate:

If you pay the higher rate (40%)

A PRSA returns more per euro than the State top-up. On the tax line alone, the PRSA wins comfortably.

If you pay the standard rate (20%)

The State top-up is worth more than the relief you would get. Auto-enrolment is the better deal on tax as well as on the match.

That second case gets very little attention and it covers a lot of the people auto-enrolment was designed for. If you earn €20,000 to roughly €44,000, the scheme is not a watered-down pension. It is a better return on your contribution than the relief route would give you.

Why the employer match usually settles it anyway

Arguing about 40% against 25% misses the larger number. Under auto-enrolment your employer pays in the same amount you do. A PRSA you open yourself, that your employer does not contribute to, has no equivalent to that. Doubling your contribution beats improving the tax treatment of a single contribution, and it is not close.

So the honest hierarchy for most employees with no workplace pension is: take the auto-enrolment match first, then consider whether you want a second wrapper on top for the money you want to invest yourself.

The trap for anyone opening a PRSA

Having a pension is what keeps you out of auto-enrolment. gov.ie states that if you are in an occupational scheme, or hold a PRSA, trust RAC or PEPP, and this is recorded in payroll, you will not be auto-enrolled.

We publish a guide to self-directed PRSAs because they are an excellent wrapper for holding ETFs without exit tax. But if opening one removes you from a scheme where your employer would have matched your contributions, you may have traded a 100% match for 40% relief. Check which side of that line you fall on before you open anything, and note the qualifier: the exclusion turns on the arrangement being visible in payroll.

You do not choose the funds

NAERSA appoints the investment managers. You get a default lifecycle strategy that shifts from higher to lower risk as you approach 66, and you can switch to a low, medium or high risk option through the employee portal. That is the extent of the choice.

You cannot hold a named UCITS ETF inside it. If picking your own funds inside a pension is the point for you, that is a self-directed PRSA, and it is a different product with a different trade-off. For most people the default lifecycle strategy is a perfectly reasonable outcome, and gov.ie is explicit that it is designed to work without the member needing any financial knowledge.

Opting out, and the part people miss

You cannot leave whenever you like. The windows are months seven and eight after enrolment, and months seven and eight after any contribution rate change. Outside those, you can suspend for one to two years instead, with no refund.

The detail worth knowing: if you do opt out, your own contributions come back to you, but the employer and State money already paid stays in your pot and is released at 66. Opting out does not undo the match you have already earned. And if you still meet the criteria, you are automatically re-enrolled after two years.

Frequently asked questions

What is My Future Fund?
My Future Fund is the brand name of Ireland's auto-enrolment retirement savings system, administered by the National Automatic Enrolment Retirement Savings Authority (NAERSA). It enrols employees who have no other pension coverage, collects contributions from you, your employer and the State, invests them, and pays out at State Pension age, currently 66. Your savings pot follows you between jobs.
Who gets automatically enrolled?
You are enrolled if you meet all three conditions: aged between 23 and 60, earning €20,000 or more a year across all employments, and without existing supplementary pension coverage. NAERSA identifies eligible employees from Revenue payroll data using a lookback of up to 13 weeks. Once enrolled you stay enrolled even if your earnings later fall below €20,000.
Do you get tax relief on auto-enrolment contributions?
No, and this is the most misunderstood part of the scheme. In the Department of Social Protection's own words, "instead of tax relief on your contributions, the State will provide a top-up contribution at a rate of €1 for every €3 you pay in". That top-up is worth about 25% of what you put in. A PRSA works the other way: contributions attract relief at your marginal rate, which is 40% if you pay the higher rate of income tax and 20% if you do not.
Is a PRSA better than auto-enrolment?
On the tax alone, a PRSA is better for a higher-rate taxpayer, because 40% relief beats a 25% State top-up. But that comparison ignores the employer contribution, which is the larger number: under auto-enrolment your employer matches you euro for euro. A personal PRSA that your employer does not contribute to has no equivalent. For most employees with no workplace pension, the match outweighs the relief difference. The case for a PRSA is strongest when you want to contribute more than the fixed auto-enrolment rate, choose your own funds, or your employer already contributes to a scheme.
Can you choose ETFs inside My Future Fund?
No. NAERSA appoints the investment managers and offers a default lifecycle strategy plus low, medium and high risk options you can switch between through the employee portal. You cannot select individual funds, so you cannot hold a specific UCITS ETF such as VWCE or CSPX inside it. If self-directed ETF investing inside a pension wrapper is what you are after, that is a self-directed PRSA, not auto-enrolment.
Does opening a PRSA stop you being auto-enrolled?
It can. The Department states that if you have a PRSA, an occupational scheme, a trust RAC or a PEPP, and this is recorded in payroll, you will not be auto-enrolled. The qualifier matters: it turns on the arrangement being visible in payroll. If you are considering a self-directed PRSA and your employer would otherwise have to match auto-enrolment contributions for you, check which one you would end up in before you open anything, because losing an employer match to gain tax relief is usually a poor trade.
Can you opt out of auto-enrolment?
Only at set points. You can opt out six months after enrolment, during months seven and eight, and again six months after any contribution rate change, during months seven and eight of that period. Your own contributions are refunded, but the employer and State contributions already paid stay in your pot and are released to you at 66. If you still meet the criteria you are automatically re-enrolled after two years. You can instead suspend contributions for one to two years at any time outside the first six months, with no refund.