Company Pensions
The occupational pension scheme is helping thousands of employees to build a retirement fund to match their later life ambitions. It is essential for employers to empower their employees to make crucial decisions about their financial future.
There is no legal obligation on employers to provide an occupational pension scheme for their employees however, there has been an increase in occupational schemes in recent years mainly due to the positive encouragement from the Government. For many employees, the state pension may not be available to claim until the age of 68 and on its own will not provide a very good standard of living.
We offer advice and support in the set up and management of your chosen pension scheme. We can also advise on compliance and audit governance to ensure that you understand your ongoing duties and responsibilities as an employer.
Types of Occupational Pensions
- CONTRIBUTORY SCHEMES
Only the employer contributes to the scheme.
- NON-CONTRIBUTORY SCHEMES
Only the employer contributes to the scheme.
- FUNDED SCHEME
All occupational schemes are funded; the contributions are allocated to a designated fund and the benefits are paid out from that fund at time of retirement.
- MASTER TRUST
Typically provided by the larger insurance companies, the insurer provides a trustee company to be the Trustee of the scheme. This removes the need for a company’s directors or employees to maintain pension qualifications and ensure that all the legal requirements are met.
- STAND-ALONE TRUST
For employers that wish to actively control their pension scheme and can meet the extensive legal requirements, a stand-alone scheme with its own trust deed and Trustees can offer a large degree of flexibility and control.
Group PRSA (Personal Retirement Savings Account)
Employees who are not yet eligible, or do not want to join an occupational pension scheme may prefer to contribute to a PRSA. Employers must offer access to a PRSA if they do not offer an occupational scheme.
A pension plan is an important part of an attractive remuneration package and a Group PRSA can be a cost-effective and simple way to help your employees save for retirement. In some cases, employers will contribute a fixed percentage of the employee’s salary, which employees will at least match. Contributions can be made by payroll deductions.
For employers, pension contributions to a PRSA are normally considered a business expense and offset against Corporation Tax. Employees enjoy income tax relief on contributions where no tax is payable on any growth during the PRSA term (subject to Revenue limits). Contributions to the PRSA are tax free up to defined limits based on age. All deducted contributions from employees are paid directly over to the PRSA provider and contributions to the scheme can increase, decrease, or stop at any time without any charge or penalty.
Contributions cannot be made to both a company pension scheme and a Group PRSA for the same employment, however employees can contribute to a PRSA in respect of earnings from another employment or from self-employment if they are members of a company scheme.
Our advisory service will assist your company to identify and set up the best Group PRSA with the most competitive charges and suitable terms and conditions. We will help to determine the most appropriate employer and employee contribution levels and guide you through the paperwork with our recommended provider. We can also advise your employees in selecting the most suitable range of pension investment funds from the options available.