Almost eight in ten employers are not properly prepared for the introduction of pension auto-enrolment, worrying new research shows.

Just 21% of organisations are ready for the My Future Fund Auto-Enrolment Retirement Savings Scheme, which begins at the end of September.

Some 40% admit to having little to no understanding of the timeline and planning needed to support the scheme, while just 17% fully comprehend them, the study also found.

Auto-enrolment is a new Government pension savings scheme for employees who have never contributed to a private fund for their retirement.

They will be automatically included in the scheme through their employment but can opt out after six months.

Ireland’s ageing population means future State-funded pension liabilities will make up a much larger proportion of Government spending, which some fear is unsustainable.

The scheme is being set up to encourage more people to save into their own pension and not rely solely on the State’s weekly Old Age Pension.

The findings revealed “a surprising lack of preparedness”, according to the survey for payroll software provider Zellis.

Asked what their organisation has done to prepare, less than half – 45% – said there has been any form of awareness campaign for payroll and HR teams, while 58% said their company had checked if its payroll system can make the necessary calculations, deductions and contributions.

Only a third have updated their employment contracts in line with the changes, it was found.

Zellis director Seán Murray said: “Auto-enrolment represents the largest change to the Irish pensions system in more than 60 years and so this research paints a concerning picture.

“There is a significant lack of preparedness and awareness.”

A statement from Department says: "A three-phase communications strategy is underway, resulting in a high level of awareness of Auto Enrolment (AE) generally.

"The Department is continuing to work with agencies already under contract to further develop and finalise the public media elements of the campaign.

"Considerable levels of stakeholder engagement have already taken place as part of phase one of the strategy, with significant numbers of employers attending various webinars at which the Department has presented.

"In addition, the Department is actively liaising with payroll providers and developers on a regular basis to ensure that they are kept abreast of developments, and to allow them to update their systems to be compliant with AE requirements.

"Future phases of the communications strategy are planned to coincide with developments in the project and to maximise impact. As we draw closer to the launch of ‘My Future Fund’, communications activity will increase significantly to ensure that all stakeholders are aware of and ready for AE."