As an employer and to ensure compliance with the provisions of The Pensions Act 1990, you will have to offer the facility to your employees to take out at least on Standard Personal Retirement Savings Plan if
- You do not currently have a pension scheme in place.
- You have employees that are not included in the pension scheme.
- You have imposed a waiting period for membership of the pension scheme of more than 6 months.
- you do not allow employees take out an Additional Voluntary Contribution (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.
In order to establish a Pension Plan for your employees, 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.
- 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 permission to talk to your staff or by allowing your staff time to talk to that provider.
- 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.
Once the scheme has been established, 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.
If you do not have a Pension established for your employees you are in breach of the provisions set out in the Pensions Act and you are liable to be prosecuted. In order to avoid this, we recommend that you contact one of our qualified pension advisors who will arrange a Designated PRSA for you. This service can be free of charge and will give you the peace of mind in knowing that your obligations have been fulfilled.