In the latest edition of Construction Magazine, celebrating International Women’s Day, CPAS looks at some of the challenges faced by women when it comes to pensions.

This month, the CIF hosted an in-person event celebrating International Women’s Day. As one of the speakers commented, it is not just about one single day in the calendar – it is about working to secure a better future for all. As a pension administration company, CPAS is focused on the future – specifically, the future of our Members. We help them save for life after work, enabling them to live comfortably with a stable financial footing throughout their retirement.

The current inflationary pressures will mean many people will see extra demands on their income. This coincides with also having to prepare financially for their long-term future. This future financial stability relies on retirement savings in order for it to be comfortable and secure. We understand the financial pressures people face and work with Members to help them understand the impact they can have on their future by making even the most modest of contributions to their pension savings. Each year for example, we remind our Members about the invaluable tax relief that is available by making Additional Voluntary Contributions (AVCs). This small step can make a big impact in the future. In fact, AVCs are also referred to as “rocket fuel”. AVCs allow Members to increase individual pension funds by maximising the tax relief they are entitled to on contributions. The limits on pension tax relief are broken down in specific bands based on age. So, for example, someone aged 33, can avail of tax relief on anything up to 20 per cent of their income that is contributed to their pension fund.

Not just an Irish issue

While everyone should be considering making the most of their pension savings by contributing what they can afford, global trends do show gender inequality still exists when looking at pension provision. According to research carried out before the pandemic, women in Ireland experience an income gap of 37% in retirement compared with their male counterparts.

There are many reasons for these inequities and while companies are not expected to resolve these challenges, there are things companies can do to help staff – mainly around acknowledging the challenges that exist and educating staff about the benefits of pension savings. Some of the impacts of gender inequality can be reduced by encouraging women to join the company pension scheme early and making pension contributions (no matter how small), consistently. However, this can only make a small dent against a greater societal challenges that exist. Pension gaps are created in a number of circumstances, including:

  • Service Gaps: There are numerous reasons why women take career leave. Statistics show that more often than not, caring in the home generally falls to women. This was amplified during the pandemic. Whether that is maternity leave, child rearing and caring for sick family members– women often take time out of the workplace and as a result, their pension savings suffer. These service gaps can also negatively impact their pension entitlements which is something that can be overlooked.
  • Pension Coverage: Two thirds of women in Ireland do not have private pension cover. Employers could help address this by informing staff of the benefits, helping staff understand the tax benefits of saving for their retirement and ensuring staff are maximising the generous pension schemes that employers have in place.

Why women should care more than men?

Pension savings should concern both genders equally. However, (according to HSE figures 2020), women live on average four years longer than men in Ireland (84.1 years for women versus 80.5 years for men). This means that their pension savings must last longer than those of their male counterparts. Furthermore, the number of people aged 65 years and over in Ireland has increased by 35.2% since 2009. This is more than double the EU average of 16% in the same period. This could negatively impact the ability of the State to support pension age adults with the same level of pension cover annually.

Planning for the future

As in life, there are many variables and changes. Planning for retirement involves forming expectations about income and expenses over the rest of your life, based on present assumptions. Our pension consultants help you cut through the complicated jargon and plan for your future. For more information, please get in touch with our team of consultants who can provide more information (

In its latest instalment for Irish building magazine CPAS looks at the complex area of Politics, Pensions and Construction, and as the pension provider for the construction sector offers advice and solutions to assist in getting pension savings and cover in place. Read the full article on the Irish Building Magazine website.

Pensions and taxes are on the bottom of the average persons ‘life admin’ list. We don’t know that for a fact, but ask anyone and they will confirm that other than Budget 2022 announcements, most of us avoid the two topics.

However, what if there was a benefit to discussing pensions and taxes once a year? (The benefits are numerous at any time of year, but particularly in October).

How are pensions, tax and October related? The answer is straightforward:

Making contributions to a pension plan could be the answer to reducing your tax bill. Making a contribution to a pension plan before the 31st October each year allows you to claim tax relief for the previous year.

Important Deadlines

October 31st (or 17th November 2021 if you use the Revenue Online Services (ROS) to pay your tax bill), is the final date on which you can claim tax relief on backdated pension contributions. In other words, this is the last chance to get some money back from the tax man for 2020. (Cheques must be received by October 29th)

If you are a PAYE employee and you save a lump sum Additional Voluntary Contribution (AVC) by cheque/Direct Debit and claim tax relief on this AVC by 31st October you can get tax relief in respect of the previous calendar year.


Additional Voluntary Contribution paid 25 October 2021:       €2,000

Reduction in 2020 tax bill (40% tax payer):                                 € 800

Actual cost to you of additional €2,000 into your pension:      €1,200

Self-employed people can also claim back some tax:

Let’s say you have a bill of €10,000 for 2020 and preliminary tax of €10,000 for 2021 to pay by 31st October 2021. You could pay Revenue the €20,000 and this job is done for another year or you could make a payment of €5,000 to your pension. This will have the effect of reducing last year’s tax bill by 40% of that €5,000 (i.e. €2000). As preliminary tax for 2020 is 100% of last year’s bill, you also reduce the preliminary tax by the same amount (i.e. €2,000).

Where would you like to see your money going?

You could pay Revenue €20,000 or you could put €5,000 in your pension and pay Revenue €16,000 (i.e. €20,000 – €2,000 – €2,000). Your total spend is only €1,000 more but for that extra €1,000, you pay Revenue the amount due and also have €5,000 in your pension fund –you are ahead now and setting yourself up for retirement!

The following table shows the percentage of your income that you can get tax relief on when contributing to a pension plan, depending on your age and subject to a current maximum annual earnings amount of €115,000p.a.

Saving for your retirement is tax efficient

As well as tax relief, the funds in which your contributions are invested currently benefit from tax-free growth, unlike most saving methods which may be liable for DIRT Tax or Capital Gains Tax. This means pension funds benefit from being able to reinvest the non-taxed returns to generate higher future returns and should build up quicker than a fund that has to pay tax on its investment returns.

In addition, when you retire, you can take part of your pension fund as a tax-free lump sum. The amount you can take depends on the type of pension plan you have in place. It is important to remember that your regular pension income or Approved Retirement Fund ARF may be subject to tax.

To learn more about your pension options, get in touch with us today. Whether you are a company director, self-employed or PAYE worker, we can help.

Budget 2022 contained few surprises. There was a lot of talk in the run up to the 12th of October and the Government gave clear signals in advance. The Government is confident that there is something for everyone in the audience, with many pundits likening it to the Late Late Show giveaway.

It has now been announced that individuals in receipt of the State Pension will receive a €5 weekly increase. This will see pensioners receive a weekly payment of €253.30 from January 2022*, instead of the lower, €248.30 per week which they currently receive. Around a third of all workers rely solely on the State pension for their retirement income.

While generous, consider how much your weekly income will drop if you are reliant on the State Pension. Can you afford to reduce your income to that extent? You might have paid off your home and your current dependants may no longer need your financial support – but is €253.30 enough for you to live on for the rest of your life? With a retirement age of 66 currently, people can expect to live (and draw down a State pension), for close to 20 years in retirement, half as long as their full working lives.

Are you looking to work until you are 68 years old?

There was little talk of the pension age in the budget this week, but it is worth a mention. While the Commission on Pensions recommended the State Pension age to remain at 66 until 2028, the 2011 Pension Act put Ireland on course to have the highest pension age in the OECD in 2028, despite the youth of our nation*. Under new recommendations discussed in Cabinet recently, the State reviewed the possibility of increasing the pension age by three months every year from 2028. Under these recommendations, the pension age would reach 67 in 2031 and 68 from 2039. It might seem like a lifetime away, but as a professional working in the construction or related industry, can you imagine working until the age of 68?

Consider this – those looking to retire in 2051 are people in their mid-thirties now and will be looking to retire around then.

If you are not sure whether the State Pension provides a sustainable life for you and your family – the best thing to do is reach out and get proper guidance. While the best time to start a pension has come and gone, the second best time is now.

The best time to start planning for your future…

CPAS administers a number of pension schemes, ensuring there is a pension scheme that suit the needs of your business – whether you are self employed or running a large company. Contact us to get started. There are no obligations, no complicated jargon – just clear facts to help you get started.





Skilled staff shortages have been widely publicised by the CIF and industry leaders of late. This ongoing shortage appears to be affecting every company – large and small – across the construction and related sectors. In this edition of Civil and Construction, we look ways to stem the loss of skilled workers with a fit-for-purpose benefits package. 

It is particularly acute in the areas of skilled workers. Construction companies are in competition with one another to attract a limited pool of skilled staff. A competitive salary and career prospects play a part in staff attraction and retention, but it is not always the deciding factor for employees. A broader benefits package can sway a prospective employee, which might include health, life and sickness cover and pension provision. These individuals are looking towards their future and want to ensure they are covered for all eventualities. The desire for a pension contribution along with other benefits may appear during the interview process, in addition to the usual salary negotiations.

Why are pensions such a hot topic?

The pensions issue has been raised as an impending problem for decades. More recently, in early 2020, before the Covid-19 pandemic changed our lives beyond anything we could have ever imagined (or feared) and Britain left the EU, Ireland went to the polls to elect a government. While the most hotly contested topics were health and housing, political parties (and media pundits) were surprised to learn that it was in fact pensions that came in as number three on the list of concerns for voters, ahead of Brexit. While we can’t say for certain what was on the minds of those who went to the polls that day, it is interesting to note that 62% of those who voted were between the ages of 18 – 24. Perhaps it was a higher priority for the more mature voter, but pensions were certainly on the voter agenda.

There is a real possibility we will not be able to rely on the State Pension in the future due to an aging population among other elements. This is where the ‘Second Pillar’ or occupational pension is vital and can be used as a benefit to attract skilled employees at a time when these are a scare resource. As an employer, you can help your employees prepare for retirement and develop this as an incentive to attract and retain employees.

What is included in a benefits package?

Along with salary, an occupational pension scheme can be provided as an option, into which an employer and employee makes a pension contribution. Schemes can be designed to provide similar contributions for all staff, or to reward experienced staff. One scheme does not necessarily have to have the same rates for all employees and can be customised to the needs of the company. More often than not, there will be life insurance, also known as death benefit or death in service. This pays out a lump sum to the dependants of an employee on their death while an employee of the company. Once again, there are varying levels of cover and you can arrange different levels of cover, for different categories of staff.

It might also be worth noting that many employees now seek health insurance. There are new types of corporate cover popping up all the time. These provide tradition health insurance blended with employee assistance programmes and employee wellness programmes. There is another benefit often worthy of consideration referred to as income protection. This is particularly important should you find yourself unable to work due to illness or injury during your career. This is not in place to cover your medical bills (that’s for your health insurance),but your ordinary living expenses. Your mortgage, utility, and other important payments. Income protection provides real peace of mind for employees. Furthermore, it is about 60% cheaper for an employer to provide this benefit under an employer sponsored arrangement than for an employee to buy an individual policy directly from and insurance company.

A fit-for-Purpose Package

Having a benefits package in place is a good starting point, but is it fit for purpose? Does it suit the demographic of your workforce? A single 25 year old might be less interested in life assurance than a 40 year old with a young family. However, the idea of an income protection policy might peak their interest. Simply put, income protection is a policy insuring a portion of your income, so you are covered in the event of a loss of earnings due to illness or injury. It can pay out until you recover or you retire.

Once an employee joins your company, it can be a challenge to highlight the benefits of pension and cover, but it is important to remind employee about excellent benefits package they receive through their employment with your company. This is an educational piece that CPAS is more than capable of assisting with for onsite and virtual employees.

When it comes to cover and pensions, our team of consultants and financial advisers are on hand to help. We can help you and your team navigate through the multiple options available and highlight the existing benefits to saving for retirement – such as tax breaks. Tax breaks are available to employees making pension contributions (e.g. Additional Voluntary Contributions), but they are also available for companies. Employer contributions receive corporation tax relief as they are offset against profits before tax. Furthermore, the costs associated with setting up a pension scheme can be onerous for even the largest of organisations but joining a Master Trust such as CERS and CWPS (administered by CPAS) removes both the high costs and complications.

CPAS – The Pension Provider for the Construction Sector

CPAS is the central point of contact for employers offering pensions, life cover, income protection and other benefits to all those employed in the construction and related sectors, from company directors, office staff, on-site workers and self-employed individuals. Our team of consultants are available for no obligation, virtual calls to help you navigate the benefits outlined above.

For more information, please get in touch with our team of consultants who can provide more information (

The last 18 months has taught us a lot. We realised the importance of hand hygiene, the incredible work our medical professionals do on a daily basis and the joy in simple things like a pint in a beer garden or embracing a loved one. This pandemic has been painful and heartbreaking in parts but it has also shown how resilient we are as a nation and how integral the construction section is to our economy and our recovery.

Naval Gazing and Crystal Balls

The pandemic gave us time to think and reflect – about our careers, our families and the precious moments we missed.

We are not clairvoyants, but as the economy reopens, many of us are looking to the future, some with hesitancy but for most of us, it is with a renewed sense of optimism.

Some may question our sanity discussing pensions during a pandemic. But as we try to deal with the here and now of daily life, it’s important not to lose sight of the future. In fact, pension reform was one of the main issues raised in the February 2020 election (we know, it feels like an age ago now). We were and still are concerned about our futures in retirement and providing a good standard of living for ourselves.

Regardless of your age, the size of your pension pot or your current situation – we all look to our future retirement with a sense of optimism. We imagine getting rid of the 6am wake up call, the ability to pack our bags and travel at the drop of a hat, spoiling grandkids, taking up a new hobby or finishing that project you have not had time to complete in recent years.

Making Ends Meet

All those optimistic hopes and daydreams will be out of reach for many on the State pension. While we do not relish in the doom and gloom of future finances, it is important to point out that the State pension (currently just under €13,000), will only provide for living expenses. The government want to ensure retirees can afford to live but the State Pension does not guarantee discretionary spending such as holidays, creature comforts and subscriptions to your favourite sports channels. According to the latest CSO figures, 65% of us have accepted this and have additional pension cover to bolster the State pension amount.

You Make the Difference

Ireland has been facing into a pension timebomb for some time. While these issues are being pushed further and further out by successive governments, there are ways in which the government have helped us to protect ourselves from the potential fallout. These take the form of generous tax relief, which is available and actively encourages us all to build up retirement savings for a healthier pension amount. These measures may face restrictions in the future, but for now, they are a great way to save on tax while saving for your future.

Taking control and Getting Back on Track

Setting goals and looking into the future is often the easy part – making the plan and sticking to it can be trickier! Pandemic aside, we understand that school fees, a veterinary bill or car repairs can derail the best-laid plans. With that in mind, we have outlined three straightforward starting points you might consider following to get you on the right track to a better life in retirement:

  • Understand the now: Knowing what you have currently in terms of assets, savings and pension pots is the first step we would advise you to take. You may have contributed to various pension pots over the years of your employment with various employers. Now is the time to track the details down and commit them to paper.
  • Know what you want in the future: This is not just the nice holidays and sports channels. It is important to understand your current expenses that will carry on into retirement. If you have kids, they will (hopefully) have flown the nest (so to speak), before you retire but what about those heating bills, house maintenance, and health expenditure. All these things are important to add to your plan. Knowing what you want from your retirement after that, should be easier. You may need your retirement savings to last up to 30 years after you retire so setting realistic expectations of the lifestyle you want and understanding what you need to have saved is really important.
  • Knowing what to do to achieve those retirement goals: Whether you are banking on a cryptocurrency pay off, hoping a land purchase returns high dividends in the future or selecting a fund for your retirement savings that you hope will make the necessary returns, it’s vital to get advice from a financial expert. When it comes to your pension, the various schemes administered by CPAS (CWPS, CIRT and CERS), can help you with your pension. For more general financial advice, we recommend Milestone Advisory. The team there can help you navigate the sometimes perilous and confusing world of finance. This way, you can rest assured, knowing your future hopes and aspirations are achievable.

Time is the most important ingredient in your plan for retirement savings. Start early and reap greater rewards (thanks to compound interest).When you know what you have, what you want and have a plan of action to help you achieve that, stick to your guns. Do not be derailed by the noise and fads. Your plan and your journey should be as unique as you are – so start today.

Pensions Not Products

CPAS is the pension scheme administrator for pensions in the construction sector. We do not look at pensions as products, but as the development of strategies, recognising your needs now and into the future. We work with our members to identify a clear vision for the future, achievable goals and then work with them to create a plan of action that they can implement today. It is about providing the right information today to help them make the most of their future.

As in life, there are many variables and changes. Planning for retirement involves forming expectations about income and expenses over the rest of your life, based on present assumptions. Our pension consultants help you cut through the complicated jargon and plan for your future in the long term.

For more information, please get in touch with our team of consultants who can provide more information (


In the first edition of Irish Building Magazine, we look at the year ahead and what it might hold.

This time last year, we wrote about a new decade with the start of 2020 and looked forward to what the next decade might hold. Who knew back then how drastically life would change for us? While many still face into another year of economic uncertainty in 2021, we still firmly believe that planning for your future should still include planning for your retirement.

Life in Circles, Not Lines

Should we fall on hard times, many of us would only be able to live off our savings for a few months (some of us have had to this year). In retirement, we can look forward to living 20 to 30 years. The question is, how long will our savings sustain us? While most of us will receive a pension from the State, this will only secure a basic standard of living and that may differ to the vision of ‘living’ we have imagined.

People often view time as linear. We see it as one-dimensional and narrow, expecting everything to happen in a sequence after which a result neatly appears. By definition, linear living has an endpoint – a finish line. Retirement is not that finish line, nor is it an endpoint. In fact, it is the start of another cycle. It goes through evolving stages that change with time. This circular (as opposed to linear) living requires us to sustain it and the best place to start is a pension. Retirement should not be the end of something, but a point in your life cycle when work becomes optional and you look forward to a future of possibilities.

Your definition of ‘life’ may differ from what the State Pension Offers

The current working population makes the existing State pension possible. According to the National Risk Assessment in 2019, the share of the population aged 65 and over is projected to increase from one in eight to one in six by 2030 and the number of people aged 85 and over, is projected to almost double.

This is an acute concern for government strategists as they struggle to project a sustainable State pension into the future. Furthermore, while Ireland has a comparatively young population relative to other EU countries, it nevertheless faces the same long-term challenges as the rest of the continent with an ageing population. While we are happy to live longer lives, this does put inevitable strain on the healthcare system. As it stands, according the National Risk Register, 60% of those aged over 50 report having at least one chronic condition.

Whether you are 5, 15 or 50 years from retirement age, saving just a small proportion of your salary can help you achieve your dreams in retirement, but most of all, provide you with much needed financial stability. Every January, we look at the year ahead and try to imagine what it might hold. Due to the pandemic and subsequent uncertainty, it is hard to envisage the future, especially our retirement, which might be years away. However, that is exactly what we are asking you to do and, on a State pension alone, that future looks bleak.

The State pension is not designed to provide for your desired future. Its purpose is to ensure a basic standard of living for all retirees nationally. It does not take into account your location, your assets, any chronic health conditions or additional requirements that involve significant investment.

It Pays to Save

No matter how you break it down, pensions can make for complicated reading. However, the basic idea is simple. Pensions are long-term savings plans that benefit from generous tax relief on contributions (subject to Revenue limits) and grow over time to provide you with sufficient income when you decide to retire. Pensions never cost as much as you think, thanks to tax relief on contributions you make (subject to Revenue limits). For example, if you are on the higher rate of tax and contribute just €100 per week to your pension, this will cost you just €60, thanks to the tax relief you will receive.

Pensions, not products

CPAS is the pension scheme administrator for pensions in the construction sector. We do not look at pensions as products, but as the development of strategies, recognising your needs now and into the future. We work with our members to identify a clear vision for the future, achievable goals and then work with them to create a plan of action that they can implement today. It is about providing the right information today to help them make the most of their future.

As in life, there are many variables and changes. Planning for retirement involves forming expectations about income and expenses over the rest of your life, based on present assumptions. Our pension consultants help you cut through the complicated jargon and plan for your future in the long term.

For more information, please get in touch with our team of consultants who can provide more information (

In the latest edition of the Irish Building Magazine, we outlined our belief that retirement is not the end of something, but a point in your life when work becomes optional and you look forward to a future of possibilities. You can read the full article here.

105 Years Old

January is the month when the internet is awash with all sorts of ‘top tips’ for saving money, maximising money, saving tax and any other goals that are linked to the New Year. However, it was an article about babies born in 2021 who are now expected to live until 105 years of age that caught our attention as pension providers. While this impressive age is something to celebrate, it struck a chord about how long our pension savings are expected to last. If you retire at 65 and live until 105, will your pension pot last for 40 years covering you through illness, home repairs, a replacement car and everything else in between?

Financial reviews are important and if 2020 proved anything, it is best to act now to protect against the unexpected. Now is the time to review your finances and look forward to a better year in 2021. For those who plan to retire in the future (i.e. all of us), we think you should start by reviewing your pension.

Why start with my pension?

Pensions are often one of the most valuable assets a person will ever own, so with that in mind, you should start by reviewing your annual pension statement. Even if you only read one or two sections of your statement, it should give you the majority of the information you need and will reveal whether you should be keeping things as they are or look to improve matters. These are four key actions you can take:

  • Complete an “Expression of Wish” form: If you die before you retirement, there could be a substantial payout through your pension scheme. This information will provide the Trustees with guidance regarding whom you would wish to receive this benefit in the event of your untimely death. Contact your pension provider for the relevant form.
  • Consider Charges and Fees: You may think that 100% of your contribution to your pension scheme goes into your pension pot. Not so in many cases. Where the administrative fees are not clear, it is worthwhile reading the small print. In the case of the Schemes administered by CPAS, your full contribution goes into your fund. We can afford to do this as we are a not-for-profit provider. This ensures we are 100% focused on making sure your funds are maximising their earning potential and every cent of your contribution stays in your fund, working for you.
  • Review Investment Choice: As you get closer to retirement age, it’s vital to consider where your pension fund money is invested and is this investment appropriate for your age and risk appetite. For example, does your fund automatically take steps to reduce your investment risk as you get closer to retirement? What happens if you plan to defer retirement for a period of years? Is this approach the right strategy for you? Are you planning to take an annuity or invest in an approved retirement fund (ARF) when you reach retirement age? There are many choices available to you and you should ensure your money is placed in the most suitable fund for your projected needs.
  • Additional Voluntary Contributions (AVCs): AVCs are a great way to boost your retirement savings if you are concerned about your current contribution levels. Going back to our advice about reading your benefit statement, this statement should give you an indication of the estimated income you will receive at retirement. If this is lower that you would like, then paying more to your pension account through AVCs is how you will improve this outcome. If you have money sitting in a current account or low interest bearing accounts, perhaps this is cash better spent securing your future retirement income – by investing it in your pension as an AVC. And the real clincher is that you can avail of up to 40% in tax relief on AVCs, which is particularly attractive if you are in the higher tax bracket.

A Closing Thought for the Start of the New Year and Goal Setting

When setting your financial goals, remember to be realistic. Take time to make small, achievable financial solutions you can work towards. You can’t spend what you don’t have, but maximise what you do. At a minimum, you should ascertain your end goals. Many of us will want to retire on at least 50% of our annual income and so, you must ask yourself, how much do I need to have saved at retirement age in order to achieve this level of income? Based on a current income of €48,000 and assuming you wish to retire on €24,000, (the State pension is currently €12,912), we estimate a requirement of €300,000 to bridge the gap. How much will you need? Are you are on track to achieve this goal?

CPAS is the scheme administrator for pensions in the construction sector. We work with Members to develop a clear vision for the future and identify achievable goals before working with them to create a plan of action that they can implement today. For help planning your future, contact a member of our team via info [at]


Divorce, similar to death or taxes, may not be a popular talking point, but when you are faced with this reality, it is worth understanding what is involved in relation to your pension entitlements.

In 1995, the Irish public voted to legalise divorce. A year later, it was written into law. While the rates of divorce have been increasing in recent years, we still have one of the lowest rates of divorce in the world. The crude divorce rate in Ireland is 0.6% a year for every 1,000 people, compared with 1.9% for the UK and 3.2% for the US*.

Why your Divorce will end up in Court.

Did you know that after the family home, a pension is often the most valuable asset a separating couple have? The Family Law Act 1995 and the Family Law (Divorce) Act 1996 enable Courts to share out pension rights between separating and divorcing couples.

Regardless of how amicable a separation, pension rights can only be divided by a Court Order. This system can sometimes be seen as complicated. As a result, couples opt to focus on the other assets and leave the pension alone, thereby negating the need for Court intervention. A spouse, a civil partner or a qualified cohabitant (subject to meeting certain conditions) can apply for a Pension Adjustment Order “PAO” at the end of a relationship. For the purposes of this article, I will refer to spouse but the information also applies to civil partners and qualified cohabitants.

Divorce and Pensions – The Process

At the beginning of the process, each spouse is required to give particulars of his/her property and income to the other spouse and this information will include full detail in relation to a member’s benefit under a pension scheme.

After consideration of this information, the Court may serve an order (known as a pension adjustment order or PAO), on the Trustees of the pension scheme of which either spouse is a member. This PAO can require the Trustees to pay a portion of the pension benefits to the other spouse or for the benefit of a dependent member of the family. The PAO requires that the Trustees pay a specified part of the retirement benefits or contingent benefits to the person(s) named in the order.

PAOs may be made in respect of the following pension arrangements:

  • Occupational Pension Schemes, in relation to retirement benefits and any contingent benefits (i.e., benefits payable on death in service). This can apply to a current pension scheme or a pension scheme of which you were formally a member.
  • Additional Voluntary Contributions (AVCs).
  • Personal Retirement Savings Accounts (PRSAs).
  • Retirement Annuity Contracts (RACs) including Trust RACs.
  • Buy out Bonds/Personal Retirement Bonds.

It is important to note that a separate PAO is required for each separate pension arrangement in your name. In addition, benefits payable under the Social Welfare Acts and disability benefits arising under an Income Protection policy are not considered pension benefits in the context of the legislation.

Divorce and Pensions – Your Options

Following the making of the PAO, the pension scheme Trustees will notify the person in whose favour the order is made. The Trustees will inform the person the amount and nature of the retirement benefits and/or contingent benefits designated under the order.

How Benefits are Calculated?

Firstly, the Court will rule on two key factors determining the amount. These are the “relevant period” and the “relevant percentage”. The relevant period may refer to the period of and can not be later than the date of granting the decree of judicial separation or divorce. This means future benefits can not be shared.

This information will also include the option of a transfer value that may be available in lieu of keeping the benefit under the existing pension scheme. For example, a PAO may be outlined as follows:

  • The period of reckonable service over which the designated benefit is deemed to have accrued, is the period commencing on 1st January 2005 and ending on 1st January 2015.
  • The relevant percentage of the Retirement Benefits accrued over the Designated Period and to be paid to the Beneficiary is 50%.

In the example shown, the spouse (who is not a member of the pension scheme), will get 50% of the benefit which the member earned in the ten year period shown. The formula for calculating the benefit due will differ depending on whether the pension scheme is defined benefit or defined contribution. In either case, the spouse who has been awarded the PAO will be offered a transfer value. They may also be given the option of establishing an independent benefit within the member’s pension scheme.

Considering remarriage?

There are some considerations when remarrying. These are:

  • The Court will not make a PAO if the spouse who applies for it has remarried.
  • If a PAO in relation to retirement benefits is made, this will be unaffected by a subsequent change in marital status of either spouse.
  • A PAO in relation to contingent benefits (benefits payable on death in service) cease to have effect if the spouse who is not a member remarries.

Impact of a Member Retirement on the Spouse.

If the member spouse retires and the spouse who benefited from a PAO has not transferred their benefit to another pension arrangement or has not established an independent benefit, the non-member spouse must also retire. A PAO must also be considered at retirement in relation to Standard Fund Thresholds and Tax Free Lump Sum payments.

Standard Fund Thresholds: When calculating a member’s threshold limit (currently €2 million), the member’s entitlement is calculated as the total value they would have received if a PAO was never made. If this calculation puts the member over the Threshold, the chargeable excess tax liability is divided between the member and the non-member spouse on a pro-rata basis.

Tax free lump sum: Subject to Revenue regulations, there are formulas for calculating the lump payable to a member on retirement. Currently, up to €200,000 of this lump sum can be paid tax free. Where a PAO exists, there is a separate €200,000 limit for the member spouse and the non-member spouse.

Divorce – A Conclusion

Pensions and divorce can be complex. The outline above offers some brief pointers but every situation is different. It is important that all parties involved are fully aware of all the various conditions and details involved. The Pensions Authority** have information on their website, offering a 46 page “brief” guide to the pension provisions of the Family Law Acts. In the event of an imminent separation or divorce, it is important to seek independent financial advice, in addition to legal expertise.

If you are going through a separation or divorce, our team can help. Simply send us an email ( we will be in touch. For financial advice, we recommend the financial consultants in Milestone Advisory DAC. The team in Milestone Advisory offer financial advice with a focus on the construction and related sectors.