Setting Up Pension Deductions

As a result of the Pensions Act (amendment) 2002, employers in Ireland are obliged to set up at least one Standard PRSA (Personal Retirement Savings Account) arrangement for their employees, if:

you operate a pension scheme but you restrict who can join the scheme or you have imposed a waiting period to join the scheme for more than 6 months
you operate a pension scheme for your employees, but the scheme does not offer any facility to make any additional voluntary contributions (AVCs) to top up their retirement benefits

Employers are also required by law to:

Notify excluded employees of their right to contribute to a PRSA by payroll deduction
For employees who wish to contribute, deduct employee contributions from wages and remit to their PRSA
Allow institutions and intermediaries who promote PRSAs, access to your excluded employees at the workplace for the purpose of taking out a standard PRSA
Allow excluded employees reasonable paid leave to enable them to make arrangements to take out a Standard PRSA
Remit to the institution operating PRSA employees' contributions deducted within 21 days of the end of the month in which the deduction is made. Employers cannot make any deduction from these contributions; they must be paid over in full to the pension provider
Notify employees each month of the PRSA contributions deducted from their wages and any contributions the employer makes to their PRSAs during the previous month (This can be done through the employees' payslips)

Pension Relief

Subject to Net Relevant Earnings thresholds, employees receive relief for PAYE on their pension contributions. Pension contributions do not attract relief from Universal Social Charge or PRSI.

AGE % of Net relevant earnings

Under 30 years of age 15%

30-39 years of age 20%

40-49 years of age 25%

50 to 54 years of age 30%

55 to 59 years of age 35%

60 years and over 40%

To set up pension deductions for an employee, simply go to Add/Amend Employees > select the Employee > select their 'Deductions' tab.

TO ENTER A PENSION DEDUCTION BY AMOUNT:

Under Pension Details, enter the pension scheme reference (if applicable) or select an existing scheme reference number from the drop down menu. A scheme reference is contained in policy documents and is usually no greater than 10 characters in length.
Enter amount for employee's contribution in the box provided
Enter amount for employer's contribution in the box provided, if applicable
Indicate the Pension type by ticking the appropriate box:

RBS: Retirement Benefit Scheme
PRSA: Personal Retirement Savings Account
RAC: Retirement Annuity Contract

The total amount entered will be deducted from the employee's weekly/fortnightly/monthly gross pay as appropriate.

Please Note: a scheme number must be entered otherwise the pension report will not copy to disk. There is no facility to allocate scheme numbers to already updated payroll.

TO ENTER A PERCENTAGE PENSION DEDUCTION

Under Pension Details, enter the pension scheme reference (if applicable) or select an existing scheme reference number from the drop down menu. A scheme reference is contained in policy documents and is usually no greater than 10 characters in length.
Enter employee's percentage of gross salary to be deducted in the box provided
Enter employer's percentage of gross salary to be deducted in the box provided, if applicable
Indicate the Pension type by ticking the appropriate box:

RBS: Retirement Benefit Scheme
PRSA: Personal Retirement Savings Account
RAC: Retirement Annuity Contract

The percentages entered will be applied to the employee's weekly/fortnightly/monthly gross pay as appropriate.

* Please Note: a scheme number must be entered otherwise the pension report will not copy to disk. There is no facility to allocate scheme numbers to already updated payroll.

TO ENTER AVC CONTRIBUTIONS

An AVC is any Additional Voluntary Contributions made by the employee to a pension scheme. As a result of the Pensions Act (Amendment) 2002, you will be required to facilitate an employee wishing to make an Additional Voluntary Contribution (AVC) to their pension.

Enter AVC amount
Click Update
Remember to zero-ise the AVC amount in the next pay period

TO ENTER A CONTRIBUTION TO A SECOND PENSION SCHEME

Click Additional
Under the section Other scheme, choose a scheme reference from the drop down menu or type in a new scheme reference. A scheme number must be entered for the secondary contributions otherwise the pension report will not copy to disk.
Enter the applicable pension amounts under Ordinary or AVC
Click Update to save second pension scheme

Please note that the percentage basis of pension deduction will no longer work for this employee if amounts are input in this section.

ORDINARY

This refers to RBS/PRSA/RAC contributions made to a 2nd scheme in addition to the main scheme. The employee and employer (if applicable) contributions are entered as the weekly, fortnightly or monthly contribution amounts. The employee amount entered is deducted from their weekly, fortnightly or monthly gross pay as appropriate.

AVC

This refers to any Additional Voluntary Contributions (AVC) made by the employee to a pension scheme.

TO ENTER A CWPS PENSION

The Construction Workers' Pension Scheme (CWPS) is a not-for-profit industry-wide scheme covering the entire construction industry in the Republic of Ireland. It was set up to replace the Construction Federation Operatives Pension Scheme (CFOPS) and started in business on July 1st 2006.

The scheme allows employers to fulfil their legal obligations of the Pensions (Amendment) Act 2002 to provide access to at least one Standard Personal Retirement Savings Account (PRSA). Membership of CWPS also provides death in service cover and sick pay benefit and it gives members the opportunity to build up valuable pension benefits for their retirement.

Since May 2013, the collection of both the Construction Industry Monitoring Agency (“CIMA”) and Electrical Pensions and Conditions of Employment (“EPACE”) deductions are suspended by CWPS so it does not form part of the 2019 deduction.

Further information can be found on www.cwps.ie

Within Add/Amend Employees > select the Employee > select their Deductions tab.