• Current students
      • Student centre
        Enrol on a course/exam
        My enrolments
        Exam results
        Mock exams
        Learning Hub data privacy policy
      • Course information
        Students FAQs
        Student induction
        Course enrolment information
        Key dates
        Book distribution
        Timetables
        FAE Elective Information
      • Exams
        Exam Info: CAP1
        E-assessment information
        Exam info: CAP2
        Exam info: FAE
        Reasonable accommodation and extenuating circumstances
        Timetables for exams & interim assessments
        Interim assessments past papers & E-Assessment mock solutions
        Main examination past papers
        Information and appeals scheme
        JIEB: NI Insolvency Qualification
      • CA Diary resources
        Mentors: Getting started on the CA Diary
        CA Diary for Flexible Route FAQs
      • Admission to membership
        Joining as a reciprocal member
        Conferring dates
        Admissions FAQs
      • Support & services
        Recruitment to and transferring of training contracts
        CASSI
        Student supports and wellbeing
        Audit qualification
        Diversity and Inclusion Committee
    • Students

      View all the services available for students of the Institute

      Read More
  • Becoming a student
      • About Chartered Accountancy
        The Chartered difference
        What do Chartered Accountants do?
        5 Reasons to become a Chartered Accountant
        Student benefits
        School Bootcamp
        Third Level Hub
        Study in Northern Ireland
        Events
        Blogs
        Member testimonials 2022
        Become a Chartered Accountant podcast series
      • Entry routes
        College
        Working
        Accounting Technicians
        School leavers
        Member of another body
        International student
        Flexible Route
        Training Contract
      • Course description
        CAP1
        CAP2
        FAE
        Our education offering
      • Apply
        How to apply
        Exemptions guide
        Fees & payment options
        External students
      • Training vacancies
        Training vacancies search
        Training firms list
        Large training firms
        Milkround
        Training firms update details
        Recruitment to and transferring of training contract
        Interview preparation and advice
        The rewards on qualification
        Tailoring your CV for each application
        Securing a trainee Chartered Accountant role
      • Support & services
        Becoming a student FAQs
        Who to contact for employers
        Register for a school visit
    • Becoming a
      student

      Study with us

      Read More
  • Members
      • Members Hub
        My account
        Member subscriptions
        Annual returns
        Application forms
        CPD/events
        Member services A-Z
        District societies
        Professional Standards
        Young Professionals
        Careers development
        Diversity and Inclusion Committee
      • Members in practice
        Going into practice
        Managing your practice FAQs
        Practice compliance FAQs
        Toolkits and resources
        Audit FAQs
        Other client services
        Practice Consulting services
        What's new
      • Overseas members
        Working abroad
        Working in Australia
        Overseas members news
        Tax for returning Irish members
      • In business
        Networking and special interest groups
        Articles
      • Public sector
        Public sector news
        Public sector presentations
      • Support & services
        Letters of good standing form
        Member FAQs
        AML confidential disclosure form
        CHARIOT/Institute Technical content
        TaxSource Total
        Audit Qualification requirements
        Pocket diaries
        Thrive Hub
    • Members

      View member services

      Read More
  • Employers
      • Training organisations
        Authorise to train
        Training in business
        Manage my students
        Incentive Scheme
        Recruitment to and transferring of training contracts
        Securing and retaining the best talent
        Tips on writing a job specification
      • Training
        In-house training
        Training tickets
      • Recruitment services
        Hire a qualified Chartered Accountant
        Hire a trainee student
      • Non executive directors recruitment service
      • Support & services
        Hire members: log a job vacancy
        Firm/employers FAQs
        Training ticket FAQs
        Authorisations
        Hire a room
        Who to contact for employers
    • Employers

      Services to support your business

      Read More
☰
  • Find a firm
  • Jobs
  • Login
☰
  • Home
  • Knowledge centre
  • Professional development
  • About us
  • Shop
  • News
Search
View Cart 0 Item

News

  • Home/
  • News
☰
  • News
  • News archive
    • 2020
    • 2019
  • Press releases
    • 2022
    • 2021
    • 2020
  • Newsletters
  • Press contacts
  • Media downloads
  • Podcasts Chartered Accountants Ireland
  • Budget day news

Changing landscape for occupational pensions in Ireland (Sponsored)

May 31, 2022
Pension auto-enrolment is around the corner. Joe Creegan, Zurich Head of Corporate Life & Pensions, explains the upcoming changes and what companies can do to prepare. 

On 29 March 2021, the Minister for Social Protection introduced to government the final design principles for a proposed auto-enrolment retirement savings system for Ireland. As the only remaining country within the OECD (Organisation for Economic Co-operation and Development) without a mandatory supplementary pension arrangement beyond the basic State pension, the objective of the proposed scheme is to ensure that every worker will have access to a workplace pension to supplement the basic State pension.

“The aim is to increase active participation of the private sector workforce in supplementary pension provision from a current level of approximately 35 percent, as measured by the Central Statistics Office, to the long since stated government policy objective of 70 percent and beyond,” explains Zurich Head of Corporate Life & Pensions Joe Creegan.

The proposal, scheduled to go live from the first quarter of 2024, will mean all employees not already contributing to an existing employer pension scheme, are aged between 23 and 60, and earning €20,000 or more across all employments, will be required to automatically enrol in the new scheme. 

According to Creegan, the proposed design, which is still subject to specific draft legislation to be passed by the Dail, envisages matching contributions from employers and employees, with a 33 percent uplift of the employee contribution from the state in lieu of income tax relief. 

The initial contribution proposed is 1.5 percent by both employer and employer and a 0.5 percent state contribution, totalling 3.5 percent of an employee’s salary, in year one. Contribution requirements will increase every three years by 1.5 percent for employer and employee, reaching a total contribution of 14 percent by year 10, made up of six percent each for employers and employees and 2 percent from the State. These contributions will apply to earnings up to €80,000.

While the proposed scheme is voluntary, the approach is opt-out rather than opt-in. Employees will be able to opt-out after month six following commencement and after six months of each tri-annual increase within a two-month window, with employees to receive a refund of their own contributions.

Outside these timeframe, the option exists to suspends contributions without a refund. In each case, the employer and State contributions also cease. Employees will automatically be enrolled again two years after cessation with the option to further suspend. 

Changes afoot even for existing pension schemes

“While the target market, estimated to be 750,000 workers, may be those currently without an existing workplace pension, this legislation will highlight challenges for existing schemes that may not wish to operate two systems with the likelihood that the Department of Social Protection will make recommendations on the prescribed standards and contribution levels for pension schemes operating outside of auto-enrolment,” says Creegan.

These standards may include:
  • Ensuring existing schemes are compulsory;
  • Ensuring that employees can join the existing scheme from day one, if aged between 23 and 60, therefore no waiting period;
  • Ensuring contributions are at the level prescribed in the design, starting at 3.5 percent in total from 2024 and up to 14 percent from 2033 (to an earnings level of €80,000); and
  • Auto-enrolment may not facilitate additional voluntary contributions or early retirement before the State retirement age, currently 66.

New EU Legislation that will affect your existing company pension scheme

While there is plenty to consider for existing pension schemes in terms of auto-enrolment, Creegan believes the implementation of IORP (Institutions for Occupational Retirement Provision) II in April 2021, which places increased governance requirements on all trustees of existing schemes, requires more urgent attention.

“The new IORP II directive is perhaps the most significant change to pension scheme legislation that we have seen in the last 30 years, and it will change how pension schemes are governed, how they manage risk and how the Pensions Authority will supervise the market,” he says.

“Pension schemes will need to implement formal governance plans and adhere to strict trusteeship standards – far outstripping anything in place today. These changes alone will increase the time burden on companies, will place greater regulatory requirements on company Trustees, and will lead to an increase in costs associated with running the pension scheme."

A master trust will significantly reduce the governance burden on companies

One solution that has come to the fore is the consideration of moving the company pension into a master trust.

“A master trust is simply a defined contribution (DC) company pension scheme set up under trust,” Creegan explains. “It differs from traditional DC pension schemes in that multiple employers all coexist under the one trust deed, hence the term master trust.  A significant advantage for companies operating under a master trust arrangement is that they will not need to appoint their own trustee boards to manage the associated governance and compliance requirements.”

He adds that the master trust is responsible for the key areas of scheme governance such as reviewing investment performance and the scheme default investment strategy, monitoring, and reviewing the Registered Administrator performance, managing the relationships with Pensions Authority, Revenue and Financial Services & Pensions Ombudsman, along with trustee administration and governance reporting. 

Zurich – Trust Active, Trust Excellence

“One of the key pillars underpinning the Zurich Master Trust is our recognised excellence in investment management,” he says.

“At Zurich, we always take a positive, active approach to managing money and we are widely recognised for our expertise in investment management, being voted number one for investment excellence for the last seven years by Brokers Ireland*. Our hands-on approach and long-term consistent track record of investment outperformance results in better retirement outcomes for scheme members. People retiring with Zurich have enjoyed better retirement pots as a direct result of our better investment returns.**”

“This investment excellence and scheme governance pedigree, coupled with our first-class administration platform and our employee engagement solutions, is why more and more local and international companies choose Zurich as their company pension partner,” Creegan continues.

“Businesses who choose the Zurich Master Trust will enjoy all the benefits of Zurich’s pension expertise, without the need to appoint their own trustee boards to manage the associated governance and compliance requirements. In an era of increasing scheme regulatory complexity and cost, the Zurich Master Trust future-proofs employee pension provision by bringing expertise and dedication to scheme governance to ensure better outcomes for employers and scheme members, especially when combined with the investment strength and financial security of a global insurance provider.”

To find out more, email joe.creegan@zurich.com or visit Zurichcorporate.ie

*Source: Awarded Investment Excellence in 2014, 2015, 2016, 2017, 2018 and Investment Provider Excellence in 2019 and 2021 by Brokers Ireland.
**Source: Zurich Life & MoneyMate, November 2021.
Zurich Life Assurance plc is regulated by the Central Bank of Ireland.

Warning: If you invest in this product you may lose some or all of the money you invest.
Warning: Past performance is not a reliable guide to future performance.
Warning: This product may be affected by changes in currency exchange rates.
Warning: The value of your investment may go down as well as up.

 

The latest news to your inbox

Useful links

  • Current students
  • Becoming a student
  • Knowledge centre
  • Shop
  • District societies

Get in touch

Dublin HQ

Chartered Accountants
House, 47-49 Pearse St,
Dublin 2, D02 YN40, Ireland

TEL: +353 1 637 7200
Belfast HQ

The Linenhall
32-38 Linenhall Street, Belfast,
Antrim, BT2 8BG, United Kingdom

TEL: +44 28 9043 5840

Connect with us

Something wrong?

Is the website not looking right/working right for you?
Browser support
CAW Footer Logo-min
GAA Footer Logo-min
CCAB-I Footer Logo-min
ABN_Logo-min

© Copyright Chartered Accountants Ireland 2020. All Rights Reserved.

☰
  • Terms & conditions
  • Privacy statement
  • Event privacy notice
  • Sitemap
LOADING...

Please wait while the page loads.