DUBLIN, Ireland: An Irish Government document has revealed that some large companies were working with financial advisers to move thousands of employees into pension schemes that could provide them with very little retirement income.

The plan was reportedly developed late last year, around the time the Department of Social Protection was preparing to introduce MyFutureFund, Ireland's automatic pension enrolment system.

An internal department note said some workers were "being compelled" to join pension schemes that had only recently been created by their employers. Some of these employees did not have pension membership included in their employment contracts, meaning that forcing them into the new schemes could potentially breach employment law.

According to the document, some of the schemes would involve an employer contribution of only one percent of an employee's salary, with no indication that the contribution would increase in the future.

The department warned that such a low contribution would probably provide workers with little meaningful financial support in retirement.

Under MyFutureFund, the initial contribution was set at 1.5 percent from the employer and 1.5 percent from the employee, with the State adding another 0.5 percent. These rates were designed to increase gradually. Combined contributions were scheduled to reach seven percent in 2029, 10.5 percent in 2032 and 14 percent in 2035.

The internal note said the companies involved were large employers with thousands of workers. It claimed they appeared to have developed the pension arrangements with professional advice and introduced them at the last possible moment as automatic enrolment was being launched.

According to the document, the timing appeared to be designed to leave little opportunity for workers or authorities to challenge the arrangements or take action before they were introduced.

The department said it had contacted one of the biggest companies involved. Following that intervention, the company quickly abandoned its proposed plan.

The document questioned why employers would consider introducing a one percent contribution when increasing it to 1.5 percent would represent only a small additional cost. It also pointed out that the introduction of MyFutureFund and its contribution rates had been known for several years, meaning companies had had plenty of time to prepare for the financial impact.

The department also said some employers had used the delay in the launch of MyFutureFund to develop alternative pension arrangements. The scheme was originally due to begin in September 2025 but was postponed to January 2026 to give employers more time to prepare.

The internal note said it was disappointing that the extra time had allegedly been used to find ways around the automatic enrolment system rather than to prepare for its introduction.

In response to questions about the documents, a Department of Social Protection spokesperson said officials had received information before MyFutureFund began indicating that some employers planned to automatically place workers into pension schemes with lower contributions.

The spokesperson said these arrangements would have offered less than the contribution levels required under the Automatic Enrolment Retirement Savings Act 2024. Workers placed in such schemes could also have been excluded from automatic enrollment in MyFutureFund.

To address the issue, the minister introduced new rules through a Statutory Instrument in December. The department said these rules require pension schemes outside MyFutureFund to provide employees with benefits that are at least as favorable as those available under the initial MyFutureFund contribution rates.