In Ireland, pensions are regulated by the Pensions Authority; a statutory body set up under the Pensions Act, 1990 (the Act). If you are an employer, you are currently under no legal obligation to provide a pension scheme to your employees. If you do not provide an occupational pension scheme, however, you must ensure they have access to a Personal Retirement Savings Account (PRSA). For more information on PRSAs, see below.
What are the types of occupational pensions?
Occupational pensions can either be contributory (whereby you and your employee make contributions), or non-contributory (whereby only the employee makes contributions).
Occupational pensions also tend to be ‘funded schemes’, meaning that all contributions are placed into an investment fund from which benefits are paid.
What is a PRSA?
You will need to provide access to a PRSA if you do not have an occupational pension scheme in place, or if you have some employees who are not included in your pension scheme.
PRSAs are a form of tax-efficient savings account. They are administered by a range of authorised providers and are open to anyone regardless of their employment status. Employees can hold both an occupational pension and PRSA concurrently. As an employer, you will typically deduct an employee’s PRSA payment from their salary and ensure these are paid to the provider.
In order to fulfil your obligations, you will need to:
- Nominate a PRSA provider
- Communicate the chosen PRSA provider to your employees – with relevant details of the type of scheme selected
- Offer your employees (in writing) the option to opt into the PRSA and have their deductions taken from their pay automatically
- Check the PRSA is approved under the Act.
You will not have to pay any contribution to the PRSA (although there are tax advantages of doing so) and you will not be responsible for the choice of funds and its performance.
Are there any penalties for non-compliance with the Act?
Yes, the Pensions Authority can issue ‘on the spot fines’ for failure to comply with the Act; €2,000 for each offence.
As such, it is important to seek professional assistance with your occupational pension provision, and when providing access to a PRSA. Lavelle Partners can assist you with regard to any pension or PRSA matter. If you are looking to implement a new scheme, or are facing a potential complaint or fine in terms of your current pension provision, we will seek to understand the issues at hand and provide you with the range of options to move forward with your best interests in mind.
How Lavelle’s employee pensions and benefits Solicitors can assist you
- Our team of employment law Solicitors, headed by Senior Partner, Marc Fitzgibbon, has been assisting employers for over 30 years with pension and benefit matters, and as a result, has developed a robust reputation nationally for achieving excellence in this area of law.
- Marc is a former member of the Law Society of Ireland’s Employment & Equality Law Committee and European Employment Lawyers Association.
- Lavelle Partners work in all areas of law (including employment law and taxation), allowing our specialist departments to collaborate to ensure you receive the best available advice in relation to pensions and benefits.
- We can assist with any aspect of employer pension and benefits including advice, disputes, negotiation, and employment contracts.
- We understand the need to ensure pensions and benefits are carried out in full accordance with employment legislation and best practice, thereby protecting your business or organisation from the threat of a complaint, fine or reputational damage.
Our partnership with Talbot Pierce
Lavelle Partners work with Talbot Pierce to provide a seamless service in respect of Human Resource Management. Talbot Pierce are a team of specialist HR professionals who work with us on a range of matters including advice on and delivery of conflict/dispute resolution solutions, best-practice HR strategies, policies and procedures.
For further information on employee pensions and benefits in Ireland, please contact Lavelle Partners in confidence on (01) 644 5800*.
*Please note that fees apply to all consultations and advice cannot be given free of charge.