CPAS Proudly Supports the Lighthouse Charity

CPAS Staff Lighthouse charity event

Backing Those Who Build Our Communities

At CPAS, we know that construction isn’t just about bricks and mortar—it’s about people. The men and women who work on sites across Ireland keep our country moving, and their wellbeing matters. That’s why we’re delighted to support the Lighthouse Charity, an organisation dedicated to looking after construction workers and their families.

Recently, CPAS made a donation to the Lighthouse Club, helping to fund vital services like mental health support, financial aid, and their 24/7 Construction Industry Helpline. But we didn’t stop there. Our team also got stuck into a bit of fundraising themselves, bringing everyone together for a great cause.

A Christmas Fundraiser with Heart

Just before Christmas, the CPAS team decided to have a bit of fun while raising money. What started as a simple idea turned into a real community effort, with plenty of laughs along the way.

One of the highlights was a staff raffle at the morning coffee, with prizes ranging from homemade cakes to small but thoughtful gifts. You’d be surprised how competitive people got over a tin of biscuits! By the end of it, we’d raised over €600—a brilliant result, and all thanks to the generosity of our team.

Then there was the walking football match, which brought out a mix of skill, enthusiasm, and, let’s be honest, a few questionable tackles. Yes, tackles! That’s what they’re called in walking football! It wasn’t exactly Premier League standard, but it was great craic and a reminder of how important it is to look after not just our finances, but also our physical and mental wellbeing.

 Supporting Those Who Support Us

The Lighthouse Charity does incredible work behind the scenes, offering support to those in the industry who need it most. Whether it’s a tradesperson struggling with their mental health, a family facing unexpected hardship, or someone in need of legal or financial advice, the charity is there to help with no strings attached.

At CPAS, we’re proud to play a small part in that mission. Construction is more than just a job; it’s a community. By backing the Lighthouse Charity, we hope to encourage others in the industry to do the same. Because when we look after each other, we all build a secure future—both on and off-site.

If you or someone you know in the industry needs support, Lighthouse’s Construction Industry Helpline is there 24/7. No one should have to face difficulties alone.

How to approach financial health for a new year

In the first edition of 2025’s Construction Magazine, Susan O’Mara, CPAS Business Development Manager and Milestone Advisory Director writes. People often see the beginning of a new year as a fresh start, usually leading with their health, and you will certainly see gym memberships increase around this time. Along with physical health, your financial health is an important aspect of your overall health and well-being. The start of a new year is a good time to give your financial health a boost.

Steps towards improving financial health

Financial health refers to the state of a person’s overall personal financial situation. It considers factors such as income, expenses, debt, and savings as measures of overall financial stability. A financially healthy individual has sufficient income to meet their daily needs, pay down debt, save for future goals, and manage unexpected expenses. Improving financial health requires effort, discipline, and a clear strategy. Here are practical steps that can lead to better financial well-being:

Create a budget: A budget helps track income, expenses, and spending habits. Tools like spreadsheets or financial apps can simplify the process and provide clarity on where money is being spent. Knowing your spending habits may help you to take a more practical approach to your budget. Furthermore, looking at your annual budget can allow you to keep track of what you are spending on goods and services. Using this as a reminder to shop around and switch providers for utilities if there is better value available.

Setting goals and saving: Set financial goals for homeownership, retirement, education, or holidays. Automatic savings is a great way to contribute toward these goals.

Pay yourself first: This means that you should prioritise a regular savings amount rather than only saving what is left over after you have paid your bills. Another important part of saving is building an emergency fund. Conventional wisdom tells us that we should set aside at least three to six months’ worth of living expenses in an emergency fund. This financial cushion can prevent debt accumulation during times of crisis.

Reduce and manage debt: Focus on paying down high-interest debt first, such as credit cards or payday loans. Consider debt consolidation or negotiate lower interest rates with lenders if needed.

Protect your assets: Ensuring that you have adequate insurance coverage, such as health insurance, life, income protection, and home insurance, to protect against unexpected financial shocks. You may not need all of these if you have no family and no debt, but you may require income protection to replace an income if you were unable to work due to illness or injury. On the other hand, if you have a family and mortgage, you are likely to need a combination of Life Cover, Income Protection, and Serious Illness cover. Balance is key, and you should speak to a financial advisor to ensure you are not over-covered in one area and under-covered in another.

Retirement planning: If you are not already participating in a retirement savings scheme or pension plan, now is the time to act. This is a fundamental way to protect your future financial health. A recent article published on RTE.ie quoting findings released by the Pensions Council found that a single person would need a pension of €33,600 a year to have a “comfortable” retirement. With the government’s auto-enrolment scheme due to commence in September 2025, pensions will be a hot topic in 2025. In the current pensions landscape, the tax relief available on pension contributions at your marginal rate of tax and the benefit of the tax-free investment growth positions pensions as an efficient way to fund your retirement.
If you are already in a scheme or plan – do you know the value of your fund? Do you know what it will provide for you at your retirement age? If not, find out. All providers send members an annual benefit statement – this document provides you with a fund value as well as an estimate of what your pension fund will be worth when you reach retirement. You may also be able to access this information online in a pension portal. Once you have done your budget, you will have a clearer idea of your income requirements and what they might be in retirement, assuming you wish your lifestyle to remain the same. What is the difference between your ideal income in retirement and the projection on your benefit statement? Do you need to bridge the gap? Even a small regular additional voluntary contribution (AVC) can achieve this in the long term. If you are close to retirement, it may be less about making contributions and more about planning which option suits you best – Annuity or ARF – you should engage with this decision now and not leave it until the day you hit the golden age!

Financial stability
Financial health is an essential part of overall well-being. By focusing on budgeting, saving, debt reduction, and financial literacy, individuals can achieve financial stability and peace of mind.

With the help of technology and a commitment to continuous improvement, financial health is an attainable goal for everyone.

Contact your pension provider to get expert help.

CPAS provides the administration support for the construction sector’s dedicated pension schemes and is registered to provide the core administration services to the Trustees of the Construction Workers Pension Scheme (CWPS) and Construction Executive Retirement Savings (CERS).

Contact Susan O’Mara via email susan@cpas.ie or phone 01 2234949.

Tips for Managing Finances in Ireland in 2025

In the latest Irish Construction Magazine, Darragh Hogan writes. As we arrive towards the end of 2024, and look ahead to 2025, managing your personal finances effectively remains a crucial aspect of ensuring financial stability and growth. Here are some practical tips to help you manage your finances in Ireland during this period:

  1. Understand the Tax System

Make sure to use available tax credits and deductions to reduce your taxable income. Along with the health reliefs available, Pensions are a key tax saving area. If you save €500 into a deposit account, it will be invested from your net income. However, if you invest the same €500 into your pension account, it will be invested from your gross income. This means, if you pay tax at 40%, your €500 investment will only cost you €300.

  1. Plan for Retirement

With the tax reliefs available, contributing to your retirement savings is a wise long-term financial strategy. Increasing your pension contributions is not only tax efficient but can secure financial comfort for you and your family in the future. If you are already contributing, perhaps 2025 is the year you explore options like Additional Voluntary Contributions (AVCs), which enhance your retirement savings and improve your income in retirement.

  1. Budgeting and Saving

Establish clear financial goals and create a budget to track your income and expenses. There may be areas where you can reduce your spending and reallocate more towards savings. Using tools like a personal budget planner can help you stay organised and focused on your financial objectives.

  1. Protection Policies

A good financial plan will always have an element of insured protection. Mortgage Protection is not the only life cover available or required and your personal circumstances will determine the level of life cover you may require. Do you have protection should you be unable to work due to illness or injury? If not, you may consider income protection. Income protection is a type of insurance policy designed to provide you with a regular income if you are unable to work due to illness or injury. This type of policy ensures that you can maintain your standard of living and meet your financial commitments even when you are not earning a salary. This type of cover can also be tailored to suit your needs. If you have not considered protecting your income this year, make sure 2025 is the year you plan for the unforeseen.

  1. Investment

Many Irish households have money sitting in deposit accounts. In the short term, this is great, however, if you do not need access to the money right away, you should consider investing your money. Investments typically offer higher returns compared to deposit accounts.

 

  1. Stay Informed About Economic Changes

Stay updated on the latest economic developments and government policies that may impact your finances. For instance, the Irish Government’s Budget 2025 includes expenditure increases, tax measures, and a cost-of-living package designed to support individuals and businesses. Understanding these changes can help you make informed financial decisions.

 

  1. Seek Professional Advice

Consider seeking advice in 2025. A survey conducted by Brokers Ireland found that those who received financial advice are more likely to have a well-funded pension, have more valuable savings and investments have improved financial outcomes.

By following these tips and staying proactive in managing your finances, you can navigate the financial landscape of 2025 and beyond with confidence.

 

Here to help you navigate your way to financial security.

The Milestone Advisory team are qualified financial services consultants. We specialise in helping professionals in the construction sector and related industries.
Our team will work with you to review your finances, explaining your options in clear English.

No jargon – just the facts.

 

For more information, contact Darragh Hogan (darragh@milestoneadvisory.ie).

For the latest updates, subscribe to our newsletter here.

Are you ready for the revenue pension tax deadline?

SUSAN O’MARA, Business Development Manager, CIF Pension Administration Services (CPAS), suggests some points you might consider with this year’s revenue pension tax deadline, 31 October, approaching.

Unlike summer, soccer, or award season, pension season is not high on the list of exciting times for most people. Understandably so! Pension season is the period leading up to the revenue pension tax deadline on 31 October. It is a time for both self-employed individuals and employees to consider making a lump-sum pension contribution.
If you are self-employed, you will be finalising your tax return at this time of the year. By making a lump sum pension contribution, you can choose to backdate the tax relief to 2023 as part of your tax return to Revenue and use the backdated tax relief to reduce any tax due for 2023.
This must be completed by 31 October, or if you pay and file your taxes online, you can avail of the extended ROS deadline to file which is 14 November 2024.
If you are an employee, you can also take advantage of this deadline. You can make a lump sum pension contribution known as an additional voluntary contribution (AVC) and claim the tax back from the previous year. For example, an employee who makes an AVC of €10,000 in 2024 can claim back €4,000 (if paying tax at 40%) from 2023.

WHAT ELSE SHOULD YOU BE AWARE OF?

Contribution Limits

  • For both self-employed contributions and employee AVCs, here are the limits on the amount you can contribute based on your age:
  • Under age 30: 15% of Remuneration
  • Age 30 to 39: 20% of Remuneration
  • Age 40 to 49: 25% of Remuneration
  • Age 50 to 54: 30% of Remuneration
  • Age 55 to 59: 35% of Remuneration
  • Age 60 and over: 40% of Remuneration

Please note the AVC limit is the combined value of the AVC and any normal pension contribution.

Definition of Remuneration

“Remuneration” is defined as all income assessable under schedule E from this employment, including benefits in kind and the value of shares provided under a Revenue-approved share purchase plan. This is currently subject to a maximum of €150,000.

Moving Between Bands

You will move from one contribution band to the next on 01 January of the tax year that includes your relevant birthday.

Lifetime Pension Limit

The lifetime pension limit, also known as the Standard Fund Threshold, is the maximum total benefit an individual may receive from all tax-approved pension arrangements, including the pension plans of previous employers. Currently, the lifetime limit is €2 million.
Recently, Minister for Finance Jack Chambers outlined a decision taken by the government to phase an increase in the SFT of €200,000 per year beginning in 2026 until 2029 to a total of €2.8 million.

AVC’s – Are there other advantages?

Aside from the value of the tax relief, the value of the fund you build up making AVCs and any other pension contributions is to fund a better lifestyle in retirement. The state pension is currently just under €14,500 per annum. All income funded through your pension and AVCs are going to enhance your financial wellbeing when you are ready to stop working.

And, finally

Finally, if you are an employee and do not have a lump sum to spare to invest in an AVC, you can still take advantage of the generous tax relief. AVCs can be made through your weekly or monthly payroll, and even better – the tax relief will be granted at source. In other words, it is done for you. Talk to CPAS, or your pension provider, to discuss what works for you, visit https://cpas.ie/avc for more.

About CPAS

CPAS are the specialists when it comes to pension provision and financial advice for employers and staff in the construction sector. CPAS administer the Construction Workers’ Pension Scheme and the Construction Executive Retirement Savings (CERS).

For more details, contact Susan O’Mara via email susan@cpas.ie or phone 01 223 4949

How to prepare for the Automatic-Enrolment Pension Scheme

This month in Construction Magazine, Susan O’Mara writes that the Governments Automatic-Enrolment Pension Scheme has finally been signed into law and we are working under the assumption that it will start collecting contributions in January 2025.

For Employers, it is crucial for you to be aware of the key details and requirements of auto-enrolment as it may affect your current pension scheme and/or your employees who are not currently in a pension scheme.

How will it work? The scheme will be operated by a new Government body called the National Automatic Enrolment Retirement Savings Authority (NAERSA). We learned recently that Tata Consultancy Service (TCS) has been named by the Department of Social Protection as the preferred bidder to manage the pension auto-enrolment system. Tata Consultancy Services is an Indian multinational information technology services and consulting company headquartered in Mumbai and has a presence in Letterkenny.

Who is Eligible? All employees aged between 23 and 60 years, earning over €20,000 per year will be entered into the auto-enrolment scheme if not already included in an existing pension arrangement.

How much are the contributions? Employers and Employees are both expected to contribute to the scheme, starting at 1.5% & 1.5% employer and employee, rising to 6% & 6% employer and employee over 10 years. This phased approach is to allow employers who do not currently have pensions to adjust to this new cost.

What should employers be doing to prepare? It is important to have an Action Plan in advance of the start date of auto-enrolment.

Employers should conduct a gap analysis of their employees to determine if there are employees not currently included in a pension scheme. If so, what is the plan for these employees? Furthermore, there are other considerations or employers, such as operating waiting periods before offering access to a pension scheme. It may be prudent to cover Pensions in employment contracts.

Important differences between auto-enrolment and existing occupational pension schemes

Are you aware of the differences between the options?

Tax relief – Under auto-enrolment, there is no tax relief as there is in typical pension arrangements. Instead of tax relief however, there is a State top-up, which is equivalent to 25% tax relief. For Employers, running an auto-enrolment scheme alongside another occupational pension scheme, means understanding the two different taxation systems that will apply to payroll. For pension scheme members paying tax at 40%, the current system is more beneficial that the auto-enrolment scheme. While for taxpayers on 20%, the auto-enrolment scheme may have a greater impact on take home pay.

AVC- Additional Voluntary Contributions (AVCS) are an effective way for members to improve their outcomes in retirement, by contributing more to their pensions. AVC’s are not possible under auto-enrolment.

Additional benefits such as death and disability benefits such as sick pay and income protection are valuable benefits for employers attracting and retaining key staff. Such benefits are not available under auto-enrolment.

 

The introduction of auto-enrolment will benefit a generation of people who otherwise would not have been provided access to a pension scheme or employer contributions. This will ultimately benefit our society in the future, so that we do not have a large number of people solely reliant on a potentially unsustainable state pension.

However, it also offers employers the opportunity to take stock to ensure that they can implement a solution that suits their needs. Talk to your pension provider as soon as possible to ensure that you are ahead of the game.

Contact your pension provider to get expert help.
CPAS are the specialists when it comes to pension provision and financial advice for employers and staff in the construction sector.
CPAS administer the Construction Workers Pension Scheme and the Construction Executive Retirement Savings (CERS).
We can ensure you are Auto Enrolment ready!

Contact Susan O’Mara via email susan@cpas.ie or phone 01 2234949.

Have you factored the government’s auto-enrolment scheme into your company’s pension strategy?

The Irish government’s pension auto-enrolment scheme due to commence in January 2025. In the latest Irish Construction News magazine, SUSAN O’MARA, Business Development Manager, CPAS (CIF Pension Administration Services), emphasises the importance of employers keeping themselves informed about the latest regulations and requirements relating to pensions.

It is always a good idea for employers to stay up to date with the latest regulations and requirements regarding pensions in Ireland. One of the most important updates for construction employers is auto-enrolment, which is now entering the final stages of its introduction.

The government’s auto-enrolment scheme has been on the cards for many years, and draft legislation is finally in the Dáil. The scheme is scheduled to commence on 01 January 2025, which is later than the mid-2023 date that was originally planned. The scheme, which endeavours to ensure that everyone working in Ireland is saving for retirement, will be co-funded by employers and the state.

Contributions to the scheme will commence at a low rate and incrementally increase over the next decade. Employers will need to ensure they have staff covered within their existing pension arrangements or their staff will automatically be opted into the government’s scheme.

Via the Sectoral Employment Orders (SEO) and previous Registered Employment Agreement (REA), the construction sector has, for close to 60 years, been ahead of the curve on pensions for specified workers anyway.

PROS AND CONS OF AUTO-ENROLMENT

Employers will need to weigh up the pros and cons of implementing auto-enrolment in their business or adapting and utilising their existing occupational pension schemes. One key area for serious consideration is the tax relief system. The current system, which makes pensions very attractive, will be different within the government scheme.

Currently, tax relief is provided to pension members on their contributions at the rate they pay tax. So, if paying tax at 40%, the cost of a €100 pension contribution would be €60. Within the auto-enrolment scheme, there will be no tax relief. Instead, the state will contribute, as outlined below, along with the proposed rates.

From 2025, employees aged 23-60 earning over €20,000 who are not already enrolled in an occupational scheme will be automatically enrolled and will have to opt out if they wish to leave. Workers will have their pension savings matched on a one-for-one basis by their employer. The state will also provide a top-up of €1 for every €3 saved by the worker.

Years Employee Employer State Total
1 – 3 1.5% 1.5% 0.5% 3.5%
4 – 6 3% 3% 1% 7%
7 – 9 4.5% 4.5% 1.5% 10.5%
10+ 6% 6% 2.0% 14%

*Employer contributions and the state top-up will be capped at a maximum of €80,000 of an employee’s gross salary.

There are other factors, such as retirement flexibility, investment choice and access to additional voluntary contributions (AVCs), and the salary cap, which employers should consider before making a decision for their business and their staff.

Currently, there is no clarity within the proposed framework regarding support from the auto-enrolment scheme in terms of member communications. This may yet fall on the employer. Employers with occupational pension schemes already in place may believe there will be no impact on them. However, this may not be the case. Many employers do not invite staff to become members of their pension scheme until they have completed their probationary period. Where this is the case, these staff may fall under the auto-enrolment scheme during this period. There may also be staff who have declined the option to join for whatever reason. They now, too, may be required to opt into the auto-enrolment scheme.

Now is the time for employers to act to ensure that they have sufficient time to consider the options available and to gain an understanding of the differences between their current strategy and what will be required once auto-enrolment is in force.

ABOUT CPAS

CPAS are the specialists when it comes to pension provision and financial advice for employers and staff in the construction sector. CPAS administer the Construction Workers Pension Scheme, the Construction Executive Retirement Savings (CERS).

For more details, contact Susan O’Mara via email (susan@cpas.ie) or phone 01 223 4949.

How to engage your workforce with the value of a pension pot

In a now annual tradition, as the CIF celebrates International Women’s Day with a view to inspiring inclusion and expanding the construction workforce. In the latest Construction Magazine, Susan O’Mara from CPAS looks at the Pension landscape for women and where Employers can add value.

Pension Coverage

The CSO regularly reports available data for Pension coverage in Ireland, with current data up to date as at Quarter 3 2022. The CSO looked at pension coverage in the State for persons aged 20 to 69 years. It found that as of Q3 2022, 68% of men were covered compared to 65% of women.

By contrast, the same survey, carried out in Q4 2005 found that 60% of men were covered versus 51% of women. Coverage has grown for both over the years, with increases in coverage for both women and men over the period.

However, despite this, research carried out by Irish Life in 2019, found that Irish women were retiring with smaller funds than men. There are several factors that contribute to this, which I have both written and spoken about in the past – however, the clear message is that pension coverage and pension adequacy are not the same thing. When you retire, will the value of your retirement fund be adequate to fund your desired lifestyle?
It is important for women (and men) to engage with their retirement planning and to think carefully about whether they are saving enough for retirement.

Employers, particularly those seeking to attract and retain staff, have an opportunity to be a part of the solution to pension adequacy. I have outlined below some key tips for employers to engage the women (and men):

  1. Construct an occupational pension scheme that is a key part of your employee benefits package and get employees engaged from the start. Your pension offering should be part of your recruitment conversation and the finer details should be included as part of your induction process.
  2. Ensure that your pension communications are clear and not full of “jargon”. One of the reasons employees find it hard to engage with the topic of Pensions is that the information can be focused on pension jargon and regulatory information. Developing simple and clear messaging around your pension offering and its value will greatly benefit employee engagement.
  3. Provide pension and financial education for your employees. This can be done via regular pension scheme updates, webinars and even one-to-one sessions. Having delivered many of these types of sessions for employers, I have enjoyed my experience over the years in witnessing that “epiphany” moment when people understand not only the importance of saving for retirement but also the significant value of the employers’ contribution to their retirement outcome.

 

A workforce engaged with the value of their occupation pension scheme through employer efforts can lead to improved employee health and wellbeing and increase employee engagement at work, while also ensuring that when employees come to retire, they can secure a more comfortable income to live on.

CPAS are the specialists when it comes to pension provision and financial advice for employers and staff in the Construction sector.

CPAS administer the Construction Workers Pension Scheme and the Construction Executive Retirement Savings (CERS). For more information and to find the right solution for you, contact our team for a no obligation discussion. Our team of financial specialists will put you in touch with the right team member. No obligations, no hidden fees, no jargon – just a straight forward chat to help you secure your present and your future.

Contact us via email (info@cpas.ie) or by phone (01) 223 4949 For the latest updates, subscribe to our newsletter here.

Health, Safety & Wellbeing in 2024

In the latest edition of Irish Building Magazine, Susan O’Mara explains the importance of reviewing pension schemes now and the proposed Pension Auto Enrolment . CPAS return as sponsors of The Irish Construction Excellence Awards (ICE Awards) for 2024 and are proudly aligning with the Health, Safety & Wellbeing category.

THE Health, Safety & Wellbeing category seeks to recognise companies that promote the importance of health, safety and employee wellbeing in the Construction Sector.

Employee Wellbeing

“Employers who currently have an occupational pension scheme in place should consider reviewing their schemes now.” Susan O’Mara — Business Development Manager

There are several factors to take into consideration when we look at employee wellbeing including topics such as financial security and health. Salary alone does not cover financial security and employer sponsored pension and benefits packages are a cornerstone of financial security for employees.

Back in 2017, Irish Life carried out a piece of research that found that employees who are included in their employer’s pension scheme are likely to feel that “Pension plans that employers contribute to are the second highest valued workplace benefits for employees in Ireland.” A lot has changed in the intervening years with workplace flexibility being a current favourite – but employees provided with pension schemes with an employer contribution tend to value their employer’s contribution to their peace of mind for their future financial well-being.

With pension auto-enrolment due to commence in 2024, Pensions have been and will continue to be topical, particularly in the media. Employers who currently have an occupational pension scheme in place should consider reviewing their schemes now.

Other benefits that are meaningful for employees’ financial well-being include Death in Service benefit, and cover when sick.
Death Benefit is typically provided with the Pension benefits and provides a lump sum payable on death. This cover is for the unexpected, but when the unexpected happens, it provides financial comfort for employees’ family and dependants.
Income Protection is another important part of a benefits package. While many of us can expect to live well into our retirement years for 1 in 4 people it’s not all plain sailing and illness or injury can be an unforeseen life event.

The World Health Organisation (WHO) stated that globally, life expectancy increased by 5 years between 2000 and 2015. You can expect to live well into your retirement years (past age 65) but for the aforementioned 1 in 4 people, an unexpected illness or injury could have grave financial consequences.

Income Protection simply put is a policy that insures a portion of a person’s income, so that in the event of a loss of earnings they can make a claim against this policy, to replace some of these lost earnings. Such loss of income is a very real concern for employees and therefore those offered access to a policy by their employer perceive this as a very valuable benefit. Furthermore, the cost can be significantly less than if an employee applies for similar cover on an individual basis. Additional health benefits included with the death benefit and Income protection benefits ranges from FREE access to online GPs and health and wellness seminars.

If you are an employer, looking to enhance your benefits package to attract and retain your valued workforce, you should consider the benefits of a great benefits package.

CPAS are the specialists when it comes to pension provision and financial advice for employers and staff in the Construction sector. CPAS administer the Construction Workers Pension Scheme and the Construction Executive Retirement Savings (CERS).

For more information and to find the right solution for you, contact our team for a no obligation discussion. Our team of financial specialists will put you in touch with the right team member. No obligations, no hidden fees, no jargon – just a straight forward chat to help you secure your present and your future.

Contact us via email (info@cpas.ie) or by phone (01) 223 4949

Things to know this Pension Season

As we approach Pension Season (yes, that is a real thing) Susan O’Mara from CPAS discusses what is right for you in the latest edition of Irish Building Magazine.

Typically, in Ireland, Pension Season is the run up to the Revenue deadline of 31 October, before which time you can claim back tax from the previous calendar year. As 31 October falls on a Bank Holiday this year, the deadline date has been moved forward to 27 October 2023. However, if you use Revenue’s online service (ROS), the deadline is 15 November 2023.

How does it work?

If you are a PAYE worker and a member of an occupational pension scheme or PRSA, you have the option to make an Additional Voluntary Contribution (AVC) into your pension. By doing so, you can avail of tax relief in 2023 for the contributions made in the tax year 2022.

If you are already making regular AVCs or annual AVCs, you may have scope to increase your contributions further. However, if you haven’t made any AVCs for the year 2022, you still have the option to do so before the end of October (or mid-November online).

 

Why would you backdate to 2022?

There are many reasons, but for example, if you have not contributed to an AVC for 2022, and you decide to do so now, you are then maximising the number of years you can claim tax relief before you retire.

How does the tax relief work?

For example, if you are paying tax on your income at 40%, then you can claim 40% tax relief on your pension contribution, i.e., your AVC.

AVC Paid into Pension Fund

 

€1000

Tax relief claimed back.

 

€400

Total Cost to you

 

€600

 

Of course €1,000 is only an example, and Revenue restrictions apply on how much you can make, based on your age and income. These are set out below.

Under Age 30 15% of Remuneration
Age 30 to 39 20% of Remuneration
Age 40 to 49 25% of Remuneration
Age 50 to 54 30% of Remuneration
Age 55 to 59 35% of Remuneration
Age 60 and over 40% of Remuneration

 

Remuneration is defined as all income assessable under schedule E from employment (including BIK and the value of shares provided under a Revenue approved share purchase plan) and is currently subject to an earnings limit of €115,000.

What is the long-term benefit other than the tax relief?

Well, to be frank, you will need an income in retirement, a phase of life that could last well over 20 years, the more you invest into your pension when working, the greater the income in retirement will be.

 

What about the self-employed?

To avoid interest and

surcharges the self-employed will need to file their 2022 Income Tax return and pay any balance owing for 2022, while also paying a preliminary income tax for 2023. These liabilities can be offset by making a pension contribution.

Contact your pension provider to get expert help.
CPAS are the specialists when it comes to pension provision and financial advice for employers and staff in the construction sector.
CPAS administer the Construction Workers Pension Scheme and the Construction Executive Retirement Savings (CERS).

Contact Susan O’Mara via email susan@cpas.ie or phone 01 2234949.

IORPS deadline is the 1st January 2023 – Is your Scheme ready?

In the latest edition of Construction Magazine, John Geraghty examines the impact of both IORP II deadline and Auto Enrolment.

By the time January 1st 2023 rolls around, the Pensions Authority expects all pension schemes to be fully compliant with all IORP II requirements. There are some organisations that have yet to make the important decisions on the future operation of their pension schemes even as the January deadline for compliance with the IORP ll deadline looms.

An Annual Compliance Statement (ACS) must also be prepared by no later than 31 January each year in respect of the preceding year. The ACS must be certified for accuracy and completeness by at least two trustees or, in the case of a corporate trustee, by at least two directors. It is vital, therefore, that employers and trustees consider their options and agree appropriate processes to manage IORP II compliance.

Making a decision

For those employers who have not already done so, they will need to decide urgently what the best solution for their defined contribution scheme is. For those who wish to continue administering their own scheme in its current format, it is possible to do so long as they support the implementation of the IORP II requirements. They must also be mindful of the enhanced levels of governance and compliance along with the additional costs incurred as a sponsoring employer.

Alternatively, for those who do not wish to take on the arduous tasks of self-administering a scheme, employers can consider an alternative pension arrangement, such as a multi-employer arrangement (or a Master Trust), which might be a more appropriate and efficient solution.

Finding a solution

Multi-employer arrangements are a bundled, fully outsourced solution. Everything is administered centrally on behalf of participating employers. The primary benefit therefore is economies of scale, a reduction in costs and delivery of time efficiencies associated with running a defined contribution pension plan, without sacrificing quality or compliance.

Right now, your immediate focus should be firmly on IORP II by 1st January 2023 and preparing and signing your 2022 annual compliance statement by 31st January 2023.

Many employers and trustees will already be working on this, however, if you have any queries or are unsure of what you need to do, please contact us, we would be happy to help.

Waiting for Auto-Enrolment or taking proactive steps?

The government’s proposed auto-enrolment scheme has been described as a ‘once-in-a-generation’ pension policy. As the only OECD country without a mandatory retirement savings system, Ireland is playing “pensions catch-up” with most of the developed world.

From 2024 employees aged 23-60, earning over €20,000, who are not already enrolled in an occupational scheme will be automatically enrolled. They will have to opt-out if they wish to leave. Workers will have their pension savings matched on a one-for-one basis by their employer. The State will also provide a top-up of €1 for every €3 saved by the employee.

There are the proposed contributions provided for by the government:

Years
Employee
Employer
State
Total
1 – 3 1.5% 1.5% 0.5% 3.5%
4 – 6 3% 3% 1% 7%
7 – 9 4.5% 4.5% 1.5% 10.5%
10 + 6% 6% 2% 14%

 

*Employer contributions and the State top-up will be capped at a maximum €80,000 of an employee’s gross salary.

Additional Considerations

Issues have arisen with the initial low level of pension contributions but in addition, individuals will be unable to make Additional Voluntary Contributions (AVCs). Employers who wish to top up the minimum amount will not be able to contribute more than the stipulated maximum.

Under the auto-enrolment system, the State subsidy of 33% of the employee contribution equates to 25% tax relief. By comparison, for Members of an occupational pension scheme, they will receive income tax relief on pension contributions at their marginal tax rate (i.e. 20% or 40%).

In CPAS, we believe, while auto-enrolment will increase the number of people saving for their retirement, the proposed system’s inflexible contribution rate and tax relief make it a less attractive proposition. As a consequence, construction companies may be better suited setting up an occupational pension scheme rather than being auto-enrolled into the State scheme. This is especially attractive to those employers’ who are looking to attract and retain skilled staff.

CPAS – Pension Specialists Serving the Construction Sector

If you are concerned about your IORP II and auto-enrolment obligations, the CPAS team can help you navigate the vast amount of information, explaining how it will impact you, your organisation and employees. Most importantly, we’ll guide you along the way, helping you maximise your investment – whether it is in your staff or your future.

Our team is available for no obligation, virtual calls to help you navigate these options. Get in touch with us via phone (01) 223 4947 or contact John directly (j.geraghty@cpas.ie). For the latest updates, subscribe to our newsletter here.

What employers need to know about pensions

In this edition of Irish Building Magazine, Susan from CPAS looks at IORP II and the impact on the pension industry in Ireland.

Much talk about pensions in the media of late has been focussed on the State Pension Age and whether it will increase past 66 or not. This was an important topic at the last election and is back on the agenda again. It appears that political parties do not expect to be re-elected if the State Pension Age is increased to 68 as previously legislated for.

Why increase the State Pension Age?

In simple terms, an ageing population, and a future landscape where more people are in receipt of the State Pension than are actively working and paying tax, makes the current level (€13,171.60 p.a.) unsustainable. Pushing the State Pension Age out to 68 was a way to decrease the burden on the Exchequer. The ramifications for employers when it comes to the State Pension Age, particularly if they don’t have a pension scheme in place, will result in employees being unable to retire before they can access the State Pension even if it’s in the best interests of the employee to do so.

IORP II deadlines

There has been less media coverage of IORP II, which could have a more significant impact on you, your business or your pension arrangement. A European directive, this was transposed into law in Ireland in 2021, under which many of the deadlines for changes have already passed or are looming.

If you are an employer already running a standalone scheme, either acting as a Trustee or paying a small trustee company to provide such services, the IORP II legislation will affect you.

One of the key areas of the IORP II legislation is around effective systems of governance. Trustees of schemes will need to implement compliant policies around risk management, internal audits, any outsourced activities and communications. This will result in a significant compliance burden and increased costs for small or stand alone schemes.

Why the media attention now?

This European directive is in the headlines this week as it transpires that the effect of the IORPII legislation has had an impact which was not previously anticipated.

With effect from 1 July 2022, the Pensions Authority advised that any “One Member Arrangement” (OMA), set up on or after 22 April 2021 must meet the full requirements of the Pensions Act, 1990, as amended (the Act). This includes the new requirements of the IORP II Directive, by 1 July 2022. The resulting compliance burdens and costs effectively could render these one person arrangements unavailable in the Irish market.

Auto enrolment

According to recent CSO figures, private pension coverage in Ireland is low. This means that many will be solely reliant on the State to provide for their income in retirement. As noted above – there are some major challenges ahead if conditions continue as they stand currently.

In 2012 the OECD reported that countries with mandatory or quasi mandatory workplace pensions have 70%+ coverage. Ireland has started on the road towards mandatory pension coverage, but there is still a long way to go. This scheme hopes to cover employed individuals who are not covered for any pension. This scheme would be funded by the individual, their employer and the State. It is slated to commence in 2024 – but that is already a later date than previously planned.

So has anything remained the same?

The pensions landscape has changed dramatically, some challenges do not – the struggle to attract and retain skilled workers for example. The core solution is to offer key talent more than just an attractive monthly salary, but to offer a meaningful pension and benefits package that employees are engaged with.

CPAS – the pension provider of choice for the construction sector

Now is the time for the construction sector to make a difference to the future of all their employees through pension savings and cover. Our team of consultants is available for no obligation, virtual calls to help you navigate these options.

Planning for the Future

As in life, there are many variables and changes. Planning for retirement and protecting your financial future involves forming expectations about income and expenses over the rest of your life, based on present assumptions. As the pension administrator for pension schemes in the construction industry, we have a range of solutions to help you prepare and protect your future investments. Whether you are self-employed, running a large company with multiple staff requirements, looking for life and income protection, we can help.

For more information and to find the right solution for you, contact our team for a no obligation discussion. Our team of financial specialists will put you in touch with the right team member. No obligations, no hidden fees, no jargon – just a straight forward chat to help you secure your present and your future.

Contact us via email (info@cpas.ie) or by phone (01) 223 4949

  • Construction Workers Pension Scheme