CORPORATE PLANS

HC Financial can provide advisory services for your company’s employee benefit arrangements. Our aim is to ensure both the employer and members fully engage with and understand the benefits available and we can advise on all aspects of your company’s group arrangements in areas including:

  • Employer Sponsored Occupational Pension Schemes
  • Additional Voluntary Contribution Schemes
  • Group PRSAs
  • Group Risk Benefit Schemes (eg. Death in Service and Income Protection)
  • Pension Effectiveness Review
  • Retirement Planning and Leaving Service Advice for Members
  • Member Education Programmes
  • Group Health Insurance
  • Corporate Trusteeship (through our dedicated trustee company HC Pensioneer Trustees DAC)

EMPLOYER SPONSORED PENSIONS

A Company Pension or Occupational Pension Scheme is one that is set up by an employer to provide pension and other benefits for employees. Your employer appoints people called ‘Trustees’ to look after your pension scheme and oversee the running of the scheme which is a separate legal entity to the employer company.

The main advantage is that your pension scheme is managed and administered on your behalf with contributions deducted from your payroll and tax relief is given to you at source on any contributions you make to the plan. Your employer takes your contributions from your salary before working out income tax so you get tax relief automatically at source.

There are two main types of Occupational Pension Scheme your employer can offer you:

  • Defined Benefit; or
  • Defined Contribution

With a Defined Benefit scheme, the pension income you get when you retire is related to your final salary and years of service with that employer. With this type of scheme, you can predict your pension income, based on your salary and years of service. However, there is no guarantee that your defined benefit plan will have sufficient funds to pay your benefits or that the scheme will not be changed by your employer.

With a Defined Contribution plan, you are not promised a percentage of your final salary. Instead, your pension income depends on the value of your pension fund when you come to retire. This in turn depends on:

  • the value of the contributions paid in by you and any paid in by your employer
  • the investment performance, or gains and losses, of the pension fund
  • the fees and charges the pension provider takes to pay for the costs of running your pension fund.

Most employer plans, and all personal pension plans and PRSAs, are now set up as defined contribution plans. So the final value of your pension can only be estimated. When you retire, your pension may be less than you expected. So you need to examine the benefit statement that you receive each year from the scheme Trustees and regularly review your contributions and investment strategy.

You may want to save more than the minimum required in order to boost your pension fund. Extra contributions are known as AVCs, or ‘Additional Voluntary Contributions’. Your employer may allow for you to pay AVCs through the group pension scheme so that you can increase your personal contribution to save enough to build a reasonable pension fund or alternatively you may wish to set up your own AVC arrangement separate from your employer’s main pension scheme. You should consider making AVCs if:

  • you want to boost the value of your pension fund
  • you do not have enough years of service to give you the pension you need
  • you wish to avail of more tax relief on your contributions

>> FAQs about Employer Sponsored Pensions

>> Pensions Authority Website

INVESTMENT CHOICES

If you are a member of a defined contribution scheme or you are making AVCs, you may be provided with a range of investment options to choose from for your pension contributions. You should carefully review the information provided on the options available before making any decisions and take professional advice if possible to ensure the investment strategy chosen is the most appropriate to your own personal needs and appetite for investment risk. It is important that you periodically review any investment decisions taken and most especially in the years running up to retirement as you may wish to protect any investment gains made.

BENEFITS AT RETIREMENT

You will have a separate pension “account” within your Employer’s Scheme into which the contributions are paid by you and on your behalf. The value of the “account” will depend on the amount of contributions invested and the investment return earned on them.

At retirement the value of this “account” will be available to provide benefits for you and your dependants within limits laid down by the Revenue Commissioners.

You will have the option to take a substantial part of your “account” as a tax free lump sum, purchase an annuity to provide a pension income or take ownership of your fund in retirement by investing in a post-retirement arrangement known as an Approved Retirement Fund (ARF).

You do not have to make these decisions during your working life. The decision as to the mix of benefits can be made at retirement to suit your circumstances at that time.

Any entitlement you may have under the State Pension (Contributory) is payable to you in addition to your retirement benefits under your employer’s pension scheme.

PERSONAL RETIREMENT SAVINGS ACCOUNT (PRSA)

A personal retirement savings account (PRSA) is a type of personal pension policy that is more flexible than the traditional personal pension plan. Anyone up to the age of 75 can take out a PRSA and you don’t have to be earning an income to do so.
If you are employed, by law your employer must offer you access to a standard PRSA if:

  • there is no employer pension scheme in place through your job
  • you are not eligible to join your employer’s pension scheme within the first six months of your service
  • you are eligible to join your employer’s pension scheme but only for death-in-service benefits.

Some Employers offer group PRSA arrangements for staff that work similarly to employer sponsored occupation pension schemes but the PRSA is personally owned by the member and these schemes do not require a Trustee. If you contribute to a PRSA set up by your employer, you get tax relief automatically and don’t have to claim it yourself. Your employer may also contribute to your PRSA but does not have to. You can also set up a PRSA if you wish to make AVCs but are not able to (and don’t wish to) do so through your employer’s pension.

GROUP RISK BENEFITS

Your employer may put in place arrangements to provide insurance benefits for you. A typical employee benefits plan would include risk benefits such as Death in Service and Income Protection. The reality is that some people will die prematurely, or may have prolonged periods of illness during their working life, making this cover an essential part of any employee benefit package.

Some employers may provide dependant’s pension death in service benefit, to provide for someone who is financially dependent on the scheme member for the ordinary necessities of life (eg living expenses). Another risk benefit that may be available is Specified Illness cover to pay a lump sum in the event of a specific illness being diagnosed.

Talk to us today on T: 091 788000 or email admin@hcgroup.ie

Financial Advice - Retirement Planning