Occupational pension schemes also known as company pension plans, are typically set up by employers to provide retirement benefits for members in the form of pensions, other taxable payments and tax-free lump sums within limits set by Revenue. Many pension schemes also provide death benefits payable to a member’s dependant’s on the death of a member.
The advantage of these schemes is that:
- your employer helps pay towards the cost of the benefits payable to you at retirement,
- you will receive tax relief on your own contributions to the pension scheme (subject to certain limits),
- investment gains on pension scheme funds are not taxed,
- the lump sum you can take at retirement is also tax-free up to certain limits and
- the pension scheme will most likely provide benefits for your dependents when you die.
If your employer does not provide you with access to an occupational pension scheme or if certain restrictions apply to their scheme, then you must be provided with access to a standard personal retirement savings account (PRSA). For further details see the ‘PRSAs’ section.