As an employerYou will have to offer the facility to your employees to take out at least one standard PRSA if:
- you do not currently have a pension scheme in place; or
- you have employees that are not included in the pension scheme; or
- you have imposed a waiting period for membership of the pension scheme of more than 6 months; or
- you do not allow employees take out an AVC plan (within the scheme rules).
If you currently have a pension scheme where all your employees are entitled to membership, you may not be affected by the legislation.
To establish a PRSA pension plan, you are obliged to:
- nominate a company (or companies) to provide access to at least one standard PRSA for your staff. This company must be a PRSA provider approved by the Pensions Board. Irish Life is an approved PRSA provider.
- communicate this choice to your staff and inform them about the PRSA facility you have decided on.
- allow your employees access to this provider, either by giving the provider (or an intermediary) permission to talk to your staff or by allowing your staff time to talk to that provider (or an intermediary).
- write to your employees offering the option to deduct regular PRSA payments directly from their pay. If your employees choose this method of payment, income tax relief will be immediate.
- ensure that the PRSA contract is approved under Part 10 of the Pensions Act 1990.
You do not need to contribute, but it is extremely tax efficient if you decide to do so.
While the PRSA is in force you are obliged to:
- send any payments deducted from the employees' salaries to the PRSA provider within 21 days from the end of the month in which they were deducted. The employee may opt to pay personal contributions from his own bank account in which case this requirement does not apply.
- send any payments you make yourself to the provider within the same timeframe outlined above.
- notify the provider and employee in writing, at least once a month, of the payments deducted from employees' salaries and any payments made by you. This relates to those contributions paid between the last such statement and this one.
As an employer:
- you do not have to contribute to a PRSA.
- you do not have any responsibility regarding the investment choice and performance of the PRSA fund(s).
If you do have a pension scheme already:
If on leaving service one of your employees wishes to transfer from this to a PRSA you must give them certain information about the trust scheme and the new PRSA facility. Your financial advisor will help you with this.
Tax information is current and could change in the future