Morgan McKinley hosted the latest in their Espresso Business Briefings with Maura Howe, Assistant Head of Policy Irish Pensions Board giving a comprehensive update on the Pensions Landscape

1. Pensions and the Workplace
Tomorrow is only a day away
Tuesday 9 April 2013
Maura Howe
The Pensions Board

2. Pensions and the Workplace
Agenda
• The Pensions Board
• Why Have a Pension?
• Pensions in the Workplace
• Employers Obligations
• On-the-spot Fines
• Criminal Offences
• Planning for retirement
•Pension into the future
•Your Pension
•Recap
Questions & Answers

3. The Pensions Board
Established by the Pensions Act, 1990

4. Why have a Pension?
Life expectancy is increasing - the average person retiring today aged 65
has a life expectancy of 20 - 23 years
What kind of lifestyle do you want in retirement and how will you fund it?
Current State pension = €230.30 per week
Consumer Market research shows that approximately 8 out of 10 people
say - that the State pension will not meet all their needs in retirement
Pension = Income in Retirement
Tax Relief on Pensions
 Income Tax and PRSI relief on employee contribution
 Part of your retirement benefit may be paid as tax-free cash sum

5. Tax Relief on Personal Contributions
The maximum contribution rate as a percentage of total pay/net
relevant earnings on which you can receive tax relief is:
Highest age at any time during the tax year Limit
Under 30 15%
30-39 20%
40-49 25%
50-54 30%
55-59 35%
60 and over 40%
Note: Contributions will also be relieved from the PRSI and the Health Levy, if you pay
these charges.
Visit the Pensions Calculator on www.pensionsboard.ie

6. Changing Demographics

7. Getting to grips with Pension Terms
Occupational Pensions Defined contribution schemes
Retirement Annuity Contracts (RACs)
Personal Retirement Savings Accounts (PRSAs)
Defined benefit schemes Private Pensions

8. The Pensions system in Ireland
• Pillar 1: State pension
– Contributory pension of maximum of €230.30 per week = 35% of average
earnings (Non-statutory political commitment to maintain at this level)
– Means-tested non-contributory pension of €219 per week
– Aim is essentially one of poverty prevention
• Pillar 2: Occupational pension schemes
– Employer sponsored Defined Benefit and Defined Contribution schemes
– Operate on a funded basis (private sector) and pay-as you go basis (public
service)
• Pillar 3: Personal pensions
Personal pension vehicles include:
– Personal Retirement Savings Accounts (PRSAs) – two types standard and
non-standard regulated by Board
– Retirement Annuity Contracts (RACs) – insurance products
• Total of pillars 2 and 3 pension fund assets = 45% of GDP - but account for just
25% of retirement income
• 75% rely on the State pension

9. Pensions in the Workplace
There is no obligation on the employer to contribute to a pension but contributing
can benefit the employer as follows –
Recruitment
• a pension is recognised as an important benefit
• pensions can attract the best candidate for the position
Reward and Retention
• a workforce that feels valued and important
• increased loyalty and commitment from staff
• an enhanced staff recruitment, reward and retention package
Offering a pension can enhance the overall reputation and respect of the
workplace as a good employer
Key opportunity in promoting and communicating the benefits of the pension to
employees

10. Employers’ Obligations
Access for all Employees
• By law an employer must provide ALL employees (whether they are in
full-time, part-time, temporary, contract or casual employment) with
access to a Personal Retirement Savings Account (PRSA) where
a) there is no pension company pension scheme in place
b) there is a company pension scheme but not all employees can
access it
c) there is a company pension scheme for death-in-service benefits
or that doesn’t permit payment of Additional Voluntary
Contributions (AVCs) by members
• The employer provide the employee with contact details for the PRSA
provider and allow them time during their working hours to make contact
• If the employee decides to contribute to a PRSA with the designated
provider the employer must facilitate this through payroll

11. On-the-spot fines
Civil Penalties
• Fines provision commenced 17 September 2007
• Specified breaches are not new – mainly administrative in nature
• Gives alternative to prosecution under the Act
• More serious breaches continue to be dealt with by going to Court
Administrative Breaches include:
• Failure to register a scheme with Board
• Failure to submit AFCs within the statutory deadlines
• Failure to provide scheme members with certain information ( do not
provide at least a monthly statement to employees showing employee
contributions deducted and employer contributions paid in the previous month)
• Failure to remit fees due to Board
• Failure to respond to requests for information from the Board ( furnish
information about their provision of access to a Standard PRSA for ‘excluded
employees’)

12. On-the-spot fines
Operation
• If within 21 days of notice, offence is remedied to satisfaction of Board
and fine is paid prosecution will not be instituted
• Fine for each offence if €2,000 per trustee (or employer)
• Fines cannot be paid out of the resources of the scheme or PRSA
• Fines considerably increase Board’s ability to ensure and motivate
compliance
See Pensions Board Trustee and Employer Checklist on
www.pensionsboard.ie

13. Criminal Offences
Remittance of Pension Contributions
Remittance of pension scheme contributions including to DB and DC occupational
schemes, PRSAs, and Additional Voluntary Contributions (AVCs) is obligatory.
S58A (1) offences and S3(4) Offences
• S58A(1) – non-remittance of employee contributions in statutory timeframe
• S3(4) – also prosecute Director/ manager for consent/connivance/neglect
• S18(5) – Failure to comply with PB request for information
• Standard of proof – beyond reasonable doubt
• Effect of proceeding is punitive, no resources restored to scheme
Summary Proceedings
• The District court has jurisdiction to hear summary proceedings brought by the
Pensions Board (S3)
• On summary conviction – fine not exceeding €5,000 or imprisonment for a term
not exceeding one year or both

14. Trustee Training Obligations
Employer Obligations for Trustee Training
• As of 1 February 2010, under The Pensions Act employers must arrange for
the trustees of their scheme (and, in the case of a trustee which is a body
corporate, for all the directors of that body corporate) to receive appropriate
training.
Please Note: An employer is not required to arrange appropriate training for a
pensioneer trustee, or a professional trustee.
New: Investment Guidelines Fact Sheet for Trustees on
www.pensionsboard.ie

15. Pensions in the workplace
Preparing for retirement during your working life
If you are not in the position to contribute to a pension there are other effective
ways of demonstrating commitment to employees beyond the workplace
• The workplace is the optimum location for pension provision and for pension
information and education
• Where the employer facilitates pension contributions through payroll the
employee gets the tax relief benefit immediately on their wages/ salary
whilst saving for retirement
• Providing pension seminars and forums facilitated through the designated
pension provider demonstrates the employer’s interest in the employee
beyond the workplace and into the future
When engaging with the pension provider remind them of the importance of
jargon-free, simple, plain English in all communications
Contact The Pensions Board for booklets & checklists, distribute an email with
the www.pensionsboard.ie link

16. Pensions – The Future
 Standardisation of the State Pension Age
– From 1 January 2014, the State pension age will become:
• 66 (for those born between 1 January 1949 and 31 December 1954) and the State
Pension (Transition) will cease to exist
– The State pension age will be increased to:
• 67 in 2021 (for those born between 1 January 1955 and 31 December 1960), and
• 68 in 2028 (for those born after 1 January 1961)
– Employment retirement age and normal retirement age (NRA) for
pension scheme purposes were generally aligned with the age the State
Pension (Transition) became payable, i.e. 65.
– From January 2014 – shortfall between 65 and 66 until State Pension is
available
– Employers and trustees should engage with employees in advance of
this change and seek professional advice where necessary.
 Auto-enrolment

17. Your Pension
Keeping Track
• It is important to keep track and monitor your pension while your
contributing to it
• Members of pension schemes should receive information regarding
the operation and rules of the scheme plus details of benefits
• Regular updates on the performance and plan for your scheme/fund
should also be provided
• You should make sure that your contributions will provide you with a
pension that will be adequate for your needs in retirement –
Pension Calculators
• Fees and charges apply to pension schemes as a cost for services,
do you know how much fees and charges are costing your scheme?
Investment, Risk, Fees and Charges Checklist on
www.pensionsboard.ie

18. Pensions and the Workplace
To Recap
• We are all living longer
• The earlier you start planning for retirement the better
• The workplace is the optimum location for pension information
• Company pension scheme offers opportunity for employers and staff
• Helping staff to plan for retirement demonstrates the employers’
interest in the long term well being of the staff
• HR play an important role in promoting the values of pensions as
benefit and preparing for retirement
• Get informed today it will help you, your employer & staff

19. Pensions Information
‘The Pensions Calculator’
Free Online Trustee
‘PRSA’s A consumer and Employers’ Training, Guidance &
Guide FAQs, E-mail alerts &
‘What are my pension options?’ Trustee supports
‘Investment Guidelines’
‘Your Pension Explained’
‘Trustee & Employer On-the-spot Fines’
‘Investments, Fees & Charges’
Enquiry service
info@pensionsboard.ie/
01-6131900
www.pensionsboard.ie

20. Questions
&
Answers