Where to go for pension advice

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TrixieBlue

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My OH works for a UK company. He was promised a pension would be commenced in 2017. They never set one up for him.
He recently plucked up the courage to ask about getting pension set up and about getting it backdated. HR have put together an offer of sorts, which to my unknowledgeable eye looks very low for what he should have gotten.
My question is what professional should we have look at this offer for us? A pension advisor? An accountant?
Neither of us know anything about pensions at all so don’t want to be misinformed on this matter.
 
There are a few things to consider when setting up a pension through an employer as the type of scheme that gets put in place dictates the retirement options he would have later on.

Kevin
www.thepensionstore.ie
 
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If the company promised to set up a pension and didn't that seems more an Industrial relations/ Contractual issue rather than anything else.

If you are trying to consider how much he should receive now to make up for not having had pension contributions since 2017, that seems a fairly straight forward matter, (unless it was a DB pension, which is extremely unlikely). If you put some figures up here you will get feedback.
 
cremeegg said:
If the company promised to set up a pension and didn't that seems more an Industrial relations/ Contractual issue rather than anything else.

If you are trying to consider how much he should receive now to make up for not having had pension contributions since 2017, that seems a fairly straight forward matter, (unless it was a DB pension, which is extremely unlikely). If you put some figures up here you will get feedback.
Click to expand...

They are offering him 2% of his pay backdated to August 2017 as a lump sum coming to a sum of €2480 or as an additional pay adjustment over the next six months. This is the opening offer, which seems to my uneducated eye , very low.

One time
Compensation		2017.8-2018.3 (8M)2018.4-2019.3
(12M)		2019.4-2019.6
(3M)		SUM
2017.8-2019.6
(23M)
62,400/12*8
= €41,600		65,520/12*12
= €65,520 		67,486/12*3
= €16,872
1%€416€655.20€168.72€1239.92
2%€832€1,310.40€337.44€2,479.84




That's as much information as I have at the moment
 
You say this is the opening offer.

Was there a different percentage of salary specified on his contract of employment when he joined?

Is it a case that this is now not being honoured, was the offer always at the rate of 2% or was this something that was to be negotiated at a later date?

Kevin
www.thepensionstore.ie
 
kevhenry said:
You say this is the opening offer.

Was there a different percentage of salary specified on his contract of employment when he joined?

Is it a case that this is now not being honoured, was the offer always at the rate of 2% or was this something that was to be negotiated at a later date?

Kevin
www.thepensionstore.ie
Click to expand...
There was no percentage specified in the contract, HR manager told him at the time.
‘The Company will start a pension scheme prior to 1st August 2017. We are trying to have a pension in place ASAP, but we cannot offer you a pension from your starting date, we will start your pension contribution the same month as the UK employee”

He thinks his UK colleagues are getting 3-5%.

They have said they won’t be able to set up an Irish pension for him, but will see about making a payment to him to cover contributions.
This is the opening offer to cover the missed payments. No written offer to cover the future.
 
It can be difficult for a UK company to facilitate these types of benefits if they don’t operate an Irish bank account.

Are they using a payroll service provider based in Ireland?

Kevin
www.thepensionstore.ie
 
Just to be clear.

The fact that his employer hasn’t set up a scheme (which they are obligated to do) as yet doesn’t stop your OH from starting a pension himself.

It’s not a case that he can’t start a pension just because a company scheme isn’t in place.

He could open a PRSA pension plan though his own bank account and receive tax relief via adjusted tax credits.

Any employer contributions could then be applied periodically as single contributions.

Unfortunately situations like this are not unusual where a UK company has only one or two employees in Ireland.

It’s not the ideal solution but if he really wants to set up his own fund (even if he doesn’t get employer contributions) then it’s easy enough to do so.

Kevin
www.thepensionstore.ie
 
TrixieBlue said:
There was no percentage specified in the contract, HR manager told him at the time.
‘The Company will start a pension scheme prior to 1st August 2017. We are trying to have a pension in place ASAP, but we cannot offer you a pension from your starting date, we will start your pension contribution the same month as the UK employee”

He thinks his UK colleagues are getting 3-5%.

They have said they won’t be able to set up an Irish pension for him, but will see about making a payment to him to cover contributions.
This is the opening offer to cover the missed payments. No written offer to cover the future.
Click to expand...

Seeing as they are two years late and in breach of his employment contract, they should pay the contributions and the growth the fund would have had over the 2 years. If they are putting in 3-5%, it won't cost them that much.

If they are a UK company, with no Irish bank account, it will have to be paid as a personal contribution from his own bank account.

Steven
www.bluewaterfp.ie
 
Technicalities of why the haven't set up a pension aside, does the pension contribution sound fair at 2%?
If I saw a job advertised, at you husband's salary level, with a benefit of company pension, I'd be expecting a minimum 4% pension contribution. If not there's not much point saying it's a benefit.
I think your husband's first port if call is actually a recruitment agent - how does his overall package stack up for his skills in the market? If it took him 2 years to ask about a pension, they'll take advantage of him elsewhere. He needs to know his value before he negotiates.
Once you've established a fair contribution level, get a PRSA set up immediately, and agree a single contribution lump sum that makes up for the missing 2 years including missed growth as pointed out by Steven.
 
2% does seem low, and the bare contribution with nothing to compensate for the growth he missed out on also seems unreasonable.

A 6% contribution, which would be perhaps generous with 5% growth would come to

€2,489 * 3 =€7,440

5% growth p.a. on the amount that should have been invested is €372 approx rounded up for the inconvenience say €8,000. That would be a very fair response.

However the most important issue if he intends to stay with the company, and indeed even if he doesn't, is what will the on going contribution be.

€1,000 now and 5% going forward would be a better outcome than a bigger initial sum and a lower future rate.

I suggest he bargain hard for a good on going rate to start say by 1st Dec and not worry too much about the arrears.

If the company forks out an arrears figure now, someone somewhere will have to justify that , "I forgot to start Johnn's pension" makes someone look bad, but "Johnny is a great guy we need to set up a decent pension for him" looks great.
 
TrixieBlue said:
Yes they are using a payroll service, they have no bank account in Ireland.
Click to expand...

They can't really use this one anymore, as an excuse.

My understanding is that they can set up a SEPA reachable account in the UK (denominated in Euro) and the pension provide here in Ireland can do a direct debit from that account.

They may even have one already.
 
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