The Irish government has made it mandatory for all businesses with a certain number of employees to enroll their staff into a pension scheme. This is known as ‘auto enrolment pension in Ireland’. It’s important that you understand how this new scheme works and how to set up your own personal pension plan so you can take advantage of the tax advantages available.
What is Auto Enrolment Pension in Ireland?
The Auto Enrolment Pension in Ireland is a new pension scheme that was introduced in 2012. It’s mandatory for all businesses with a certain number of employees to enrol their staff into a pension scheme. The minimum number of employees required is 10, but there are other factors which can affect how much money you need to pay into the pension fund too.
What is the National Employment Savings Trust (NEST) in Ireland?
The National Employment Savings Trust (NEST) is a government-backed pension scheme that was set up in 2012. It’s administered by the Pensions Board and available to employers that are not required to set up a scheme, such as small businesses or those with fewer than 20 employees.
What does this mean for you? Well, if you’re an employee at one of these companies, then your employer may have enrolled them into NEST already–but if not, they can still do so at any time before their deadline (more on that later). If they do decide to opt out of auto enrolment altogether, then it will be up to each individual employee whether they want to opt in themselves or not.
How does an automatic enrolment pension work in Ireland?
In Ireland, you’ll soon be automatically enrolled into a pension scheme if you work for an employer with more than 20 employees. This means that if you’re an employee and do not already have an existing pension arrangement in place with your employer, they will automatically enrol you into their chosen pension provider and start contributing towards it on your behalf. You may also choose to opt out at any time during this process or once it’s completed if:
- You don’t want to be enrolled in any way (even though this might mean missing out on valuable tax relief)
The government has made it easy for employers by simply requiring them to provide information about their chosen provider(s), including contact details and where employees can find more information about what benefits are available through those providers’ websites.
How do I set up my own personal pension plan?
To set up your own personal pension plan, you’ll need to fill out Form P45. You can do this with a financial advisor or online. And if you’re employed by an employer that offers auto enrolment, they may handle the entire process for you!
Are there any tax advantages to setting up an auto enrolment pension?
There are no tax advantages to setting up an auto enrolment pension Ireland.
However, there could be some tax advantages for employers and employees. For example:
- Employers can claim a deduction from their corporation tax bill for contributions they make to their staff’s pensions (up to 4% of staff salaries). This means that if you’re self employed or running a small business, you won’t have to pay any extra income tax on those contributions when calculating your annual return.
- Employees who pay into their own personal NI accounts are entitled to deduct any contributions made from their taxable income before calculating how much they’ll have left over after paying all taxes due at the end of each year
What are the benefits of having an auto enrolment pension in Ireland?
Auto enrolment pensions in Ireland have a number of benefits. The pension fund is not taxable until you start drawing it, and even then only at marginal rates. If you die before starting to draw your pension, your beneficiaries will receive the funds tax-free.
If you are a non-resident of Ireland and have an auto enrolment pension here, the income earned on this fund will not be taxable in Ireland while it remains invested abroad.
The government has made it mandatory for all businesses with a certain number of employees to enroll their staff into a pension scheme.
The government has made it mandatory for all businesses with a certain number of employees to enroll their staff into a pension scheme.
The employer must then contribute to that pension scheme on behalf of their employees.
Employees have a choice of schemes, which they can choose themselves or select through the employer if they prefer not to do so themselves.
Conclusion
We hope this article has helped you to understand the benefits of having an auto enrolment pension in Ireland. If you are looking for a new job or want to change your current one, we would love to hear from you!