Processing Pensions

PENSIONS

Since 2003, employers in Ireland are obliged to provide access to at least one standard PRSA for all their employee's.

Employer's Requirements

As a result of the Pensions Act (amendment) 2002, you will be required to set up at least one Standard PRSA (Personal Retirement Savings Account) arrangement for your employees if:

Ø You operate a pension scheme but you restrict who can join the scheme, or you have imposed a waiting period to join the scheme for more than 6 months.

Ø You operate a pension scheme for your employees, but the scheme does not offer any facility for your employees to make additional voluntary contributions (AVC's) to top up their retirement benefits.

You will also be required by law to:

Ø Notify your excluded employees of their right to contribute to a PRSA by payroll deduction

Ø For employees who wish to contribute, deduct employee contributions from wages and remit to their PRSA

Ø Allow institutions and intermediaries who promote PRSA's worksite access to your excluded employees for the purpose of taking out a Standard PRSA

Ø Allow excluded employees reasonable paid leave to enable them to make arrangements to take out a standard PRSA

Ø Remit to the institution operating the PRSA, the employee's contributions deducted, within 21 days of the end of the month in which the deduction is made. You can't make any deduction from these contributions; you must pay them over in full to the PRSA Provider.

Ø Notify your employees, each month, of the PRSA contributions deducted from their wages and any contributions you make to their PRSA's during the previous month. This can be done through the employee's payslips.

Pension Relief

Pension contributions paid will benefit from tax relief at an individual's marginal rate. The maximum allowable contribution for tax purposes in any year, are as follows:

AGE % of NET RELEVANT EARNINGS

Under 30 years of age 15%

30-39 years of age 20%

40-49 years of age 25%

50 to 54 years of age 30%

55 to 59 years of age 35%

60 years and over 40%

Employee PRSI relief on Pension contributions has been abolished with effect from 01st January 2011. All employee Pension contributions are subject to USC.

ENTER A PENSION DEDUCTION BY AMOUNT:

Ø Choose a scheme reference number from the drop down menu or type in new reference number

Scheme reference is contained in policy documents and is usually no greater than 10 characters in length.

Ø Enter amount for employee's contribution in the box provided

Ø Enter amount for employer's contribution in the box provided

Ø Indicate the Pension type by ticking the appropriate box

            RBS: Retirement Benefit Scheme
            PRSA: Personal Retirement Savings Account
            RAC: Retirement Annuity Contract

Ø The total amount entered will be deducted from the employees weekly, fortnightly or monthly gross pay as appropriate.

* Please Note: A scheme number must be entered otherwise the report will not copy to disk. There is no facility to allocate scheme numbers to already updated payroll.

ENTER A PERCENTAGE PENSION:

Ø Choose a scheme reference/name/number from the drop down menu or type in new reference/name/number

Scheme reference is contained in policy documents and is usually no greater than 10 characters in length.

Ø Enter employee's percentage of gross salary to be deducted in the box provided

Ø Enter employer's percentage of gross salary to be deducted in the box provided

Ø Tick the percentage tick box - this indicates that amounts entered are percentages

Ø Indicate the Pension type by ticking the appropriate box :

            RBS: Retirement Benefit Scheme
            PRSA: Personal Retirement Savings Account
            RAC: Retirement Annuity Contract

Ø The percentages entered will be applied to the employees weekly, fortnightly or monthly gross pay as appropriate.

ENTER A CONTRIBUTION TO A SECOND PENSION SCHEME:

Ø Click Additional

Ø Under the section Other scheme, choose a scheme reference from the drop down menu or type in new reference/name/number

A scheme number must be entered for the secondary contributions otherwise the pension report will not copy to disk. There is no facility to allocate scheme numbers to already updated payroll.Scheme reference is contained in policy documents and is usually no greater than 10 characters in length.

Ø Enter pension amount under Ordinary or AVC

Please note that the percentage basis of pension deduction will no longer work for this employee if amounts are input in this section.

Ø Click Update to save second pension scheme

ORDINARY

This refers to RBS/PRSA/RAC contributions made to a 2nd scheme in addition to the main scheme. The employee and employer (if applicable) contributions are entered as the weekly, fortnightly or monthly contribution amounts. The employee amount entered is deducted from their weekly, fortnightly or monthly gross pay as appropriate.

AVC

This refers to any Additional Voluntary Contributions (AVC) made by the employee to a Pension scheme.

ENTER AVC CONTRIBUTIONS

An AVC is any Additional Voluntary Contributions made by the employee to a Pension scheme. As a result of the Pensions Act (Amendment) 2002, you will be required to facilitate an employee wishing to make an additional voluntary contribution (AVC) to their pension.

Ø Enter AVC amount

Ø Click Update

Ø Remember to zeroise the AVC amount in the next pay period

ENTER CWPS PENSION

Building firms are legally required under the Registered Employment Agreement (Construction Industry Pensions Assurance & Sick Pay) to register all qualifying employees in a compliant pension scheme.

CWPS provides a pension, sick pay and a death-in-service benefit in line with legal requirements. The death-in-service payment applies whether the death occurs at the workplace or outside working hours.

From May 2013 the collection of both the Construction Industry Monitoring Agency (“CIMA”) and Electrical Pensions and Conditions of Employment (“EPACE”) deductions are suspended by CWPS so it does not form part of the 2015 deduction.

Further information can be found on www.cwps.ie

Click CWPS
Click Yes if you wish to use the default CWPS deductions for 2015
Review default CWPS deductions carefully. You can amend amounts of necessary.
Click Update when finished

ENTER NECI (National Electrical Contractors Ireland) PENSION

NECI provides a pension, life assurance and income protection in line with legal requirements. A Short-term Accident Payment is also covered in the NECI pension plan.

More information can be found at www.neci.ie