Employer making pension contribution insisting on who provides pension to employee

[Tobyboy]

Where an employer is offering to contribute to a pension for an employee, and that employee already has a pension and wants to stay with their own pension provider, can the employer say they have their own pension broker and insist the employee has to use a different pension provider because its what they have set up?

 

[Adelie]

No they can’t insist the employee uses a different pension provider. But they don’t have to start working with the employee’s provider either.

Employee can keep their existing pension provider and either start a new pension or decline the employer contributions.

 

[GSheehy]

Surprising the broker doesn't know the answer.

If it's a PRSA Scheme then they don't have to facilitate a different pension provider. But, they can.

If it's a PRSA Scheme there's (usually) no issue with using own broker if scheme provider is the same. But, that might be on the condition that the 'new' broker doesn't start haunting other employees about setting up a pension through them. On execution only it's usually not an issue as the contact is initiated by employee and intermediary isn't approaching staff and taking up employer/employee time. Plus, most employers can't argue with the saving on employer and employee contribution charges.

Not sure of rules on occupational pension schemes but I'd say it'd be difficult to get an employer to agree to what you're trying to do.

Gerard

www.prsa.ie

 

[Gordon Gekko]

Where an employer is offering to contribute to a pension for an employee, and that employee already has a pension and wants to stay with their own pension provider, can the employer say they have their own pension broker and insist the employee has to use a different pension provider because its what they have set up?

I’m pretty sure that’s the case, yes.

If an employer is willing to contribute to Scheme X for its employees, there’s no obligation to contribute to some other scheme of the employee’s choosing. Senior people might get some leeway, but it makes sense really, as otherwise there could be a myriad of different schemes and contributions to manage.

 

[Tobyboy]

So if the employer insists on using Provider A, the employee has no choice if they want to receive the employers 6% contributions? Is this correct? Is there any way around that if so?

 

[Harvard]

I did hear of a case where an employer swapped the business from the employee's selected broker to a broker that happened to be his brother. The first the employee knew about it was when she got a sarky text from her preferred broker.

 

[ClubMan]

So if the employer insists on using Provider A, the employee has no choice if they want to receive the employers 6% contributions? Is this correct?

Yes.

Is there any way around that if so?

Only if the employer facilitates different arrangements and, in most cases, they probably won't as it could end up being messy if more and more employees need to be facilitated via alternative arrangements.

 

[Gordon Gekko]

So if the employer insists on using Provider A, the employee has no choice if they want to receive the employers 6% contributions? Is this correct? Is there any way around that if so?

Yes and no, in that order, as ClubMan has pointed out. A senior employee might have some leverage, but that’s a commercial point.

 

[Tobyboy]

Thanks for the replies folks, much appreciated.

 

[Persius]

Is it an occupational pension scheme or a PRSA?
If it's a PRSA, what's the reason that you don't want to use the provider that the employer offers? Is the charge too high?

If it's a PRSA, one option might be to make the minimum contribution from your pay to get the employer's 6% contribution.
I think you could then have a second PRSA and you could make additional contributions to it from your net pay and then claim tax relief afterwards. But I'm not 100% sure about being able to claim tax relief from two different PRSAs relating to the same employment. Perhaps some other posters could clarify that.