Workplace pensions

Occupational pension schemes

Occupational pension schemes also known as company pension plans, are set up by employers and can provide a tax-free lump sum within certain limits, and pension income in retirement. These benefits will be based either on your final or career earnings or on the value of your retirement fund.

The advantage of occupational pension schemes is that:

• your employer helps pay towards the cost of the benefits,
• you will receive tax relief on your own contributions,
• your investments roll up tax-free, and
• the lump sum you can take at retirement is also tax-free up to certain limits.

There is no legal obligation on an employer to set up an occupational pension scheme. If an employer sets up an occupational pension scheme for their employees, the employer has a number of obligations that they must fulfil to be compliant with the relevant legislation and regulations.

If you are a member of an occupational pension scheme, you are entitled to information about your pension benefits, how the scheme is run and how the pension fund is performing. The trustees of the scheme must give you this information. Your employer also has to give you certain information.

As a member you should regularly check that you are contributing enough to provide you with the income you want in retirement.

The Authority has published model disclosure documents which communicate as clearly and meaningfully as possible the information that should be given to scheme members, which are available here.  These documents aim to provide understandable information in a structured manner so that members can make informed decisions about their retirement savings.

If you have a complaint about your occupational pension scheme you should contact your employer and/or trustee.

Personal retirement savings accounts (PRSAs)

If your employer does not provide you with access to an occupational pension scheme or if certain restrictions apply to their scheme, by law they must ensure that their employees have access to at least one standard personal retirement savings account (PRSA). An employer who is obliged to provide PRSA access in this way must fulfil a number of additional specified requirements, including certain remittance and disclosure obligations.

Information on employer obligations and information in relation to the types of pension plans you can set up for your employees – occupational pension schemes and PRSAs – is available here.

For information on understanding the various type of pensions, how they work and the information that must be given to members see the ‘Understanding pensions’ section.