Group Pensions
Occupational pension schemes are set up by you to provide retirement benefits to your employees.

You have a statutory duty to provide access to a PRSA, at minimum, so your employees can save for retirement. While there is no legal obligation to arrange a company pension scheme, there are many reasons to. It can help attract and retain top talent, particularly when you commit to contribute to their retirement savings. Your employees feel more valued when their employer is investing in their future.

We can help you implement and ‘design’ a group pension to suit your companies circumstance by considering the following options:

Normal Retirement Age (NRA):

Company pension schemes must have a retirement age between 60 and 70. Companies typically selected 65 to coincide with the state pension age. As this has now increased to 66, new schemes are selecting this as their normal retirement age.

Eligibility Conditions:

Employers can choose whether they would like to offer pension benefits immediately or whether there is a wait time to join the scheme. Companies with a high staff turnover will often have a waiting time before employees can join a pension scheme.

Contribution Rates:

Company pension schemes are usually set up on a contributory basis with both you and your employees making contributions, you can select the contribution amounts to suit your budget. There are minimum employer contributions – they must be one-tenth of total contributions being paid (excluding AVCs).

In Ireland, the most common contribution rate for a pension scheme is 10% – with 5% contributions from both the employee and the employer. Some schemes have a tiered contribution scale as employers increase their contributions for employees who have a certain number of years of service.

Group pension schemes are set up under trust, either by a letter of exchange (for single members) or by a trust deed for groups. A company seal is required for a declaration of trust and it must be signed by two directors or a director and the company secretary, it then must be signed and sealed by the trustees. Schemes must be established under trust to protect the scheme members’ funds and ring-fence them until they can draw their benefits from the pension scheme. A trust is also required for full Revenue approval. Once granted, this means that the scheme can avail of many tax advantages, such as:

  • Tax relief on employee contributions (up to age limits),
  • Tax relief on employer contributions
  • Tax-free growth on funds
  • No Benefit-in-Kind tax on employer contribution

The trustees of a company pension scheme can make the investment decision on behalf of all members or provide members with investment choices. There is a default investment strategy selected by the trustees, the majority of employees in a corporate scheme will opt for the default strategy. Lifestyle investment strategies are the most suited for most occupational pension schemes. This strategy focuses on growth in earlier years – investing in equities and then moving the members into funds that will safeguard their assets as they near retirement.

Employers have been moving away from being the trustee on their own company pension schemes as there is a requirement for trustee training to be completed every 2 years. It is now more common to use external corporate trustees.

As well as helping to implement and design your scheme, we will meet new any new entrants to explain the scheme benefits, the choice of investment funds available, discuss the advantages of making Additional Voluntary Contributions (AVCs) and where the member has previous pension benefits – advise on whether they should be transferred to this scheme. We will also issue members with leaving service options (LSO) if they are leaving the scheme.

Connect with our team and discover how we can help your finances thrive.