Why should my Employer contribute to my PRSA

Thanks CapitalCCC. I never doubted myself. Except maybe once above and once in that other thread and ... ;)
 
Tks a million for clarification. Much appreciated.
Will put that forward as part of my plea! together with the fact that I am a L’Oreal Girl - basically “because I’m worth it”. Well God loves a trier!! Will keep you posted how things go.
 
Back to this again folks. Just rang revenue and any contributions made by my employer will be seen as Benefit in Kind and I will be the one paying the PRSI and PAYE contributions on this. I can fully understand why the oridinary "joe soap" doesn't bother contributing to pension.
 
Happy Girl said:
Back to this again folks. Just rang revenue and any contributions made by my employer will be seen as Benefit in Kind and I will be the one paying the PRSI and PAYE contributions on this. I can fully understand why the oridinary "joe soap" doesn't bother contributing to pension.
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This does not sound correct. Revenue are not always right.
 
As far as I understand employer contributions are indeed deemed to be BIK, however the Revenue have adopted a practice of ignoring the BIK implications of such contributions, provided the global amount of the contributions is within the allowable age-related percentage.
 
This same point is running simultaneously in another thread.

Yes it would be a BIK to a personal pension but not to a PRSA.

Even then, with the Personal Pension, the policyholder could claim relief for those contributions as if they were paid by the policyholder him/her self...so the overall impact is tax relief.
 
Happy Girl said:
Back to this again folks. Just rang revenue and any contributions made by my employer will be seen as Benefit in Kind and I will be the one paying the PRSI and PAYE contributions on this. I can fully understand why the oridinary "joe soap" doesn't bother contributing to pension.
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Doeas anyone know for sure...I thought an employer contributing the 10.75% as a gesture of goodwill was perfectly fine (and cost neutral)?
 
I know I'm taking this thread a bit off-topic but....

What all this confusion about tax relief, PRSI relief etc. says to me is that it's high time the government scrapped the existing (confusing) tax relief regime and introduced a simple and transparent alternative. In my view they should opt for a "SSIA-style" approach - whatever you contribute to your pension gets a matching contribution from the government (e.g. €1 for every €2 you put in).

As the OP says, the existing system is just too complicated and off-putting for a lot of people.
 
Sherpa said:
I know I'm taking this thread a bit off-topic but....

What all this confusion about tax relief, PRSI relief etc. says to me is that it's high time the government scrapped the existing (confusing) tax relief regime and introduced a simple and transparent alternative. In my view they should opt for a "SSIA-style" approach - whatever you contribute to your pension gets a matching contribution from the government (e.g. €1 for every €2 you put in).

As the OP says, the existing system is just too complicated and off-putting for a lot of people.
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Good call...and give everyone the equivalent of tax relief at the higher rate. It's pretty unfair that the less well off in society don't get the same deal. The success of the SSIA's was based on the transparency of the deal...it was a no-brainer. Pensions are still pretty mysterious and it can be difficult to see the immediate benefits for some people.
 
Sherpa said:
As the OP says, the existing system is just too complicated and off-putting for a lot of people.
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Totally agree. The various options/permutations and technicalities are far too complex. And the administrative cost for all parties (employees, employers, Revenue, underwriter etc.) could surely be reduced by a simpler system.

KalEl said:
It's pretty unfair that the less well off in society don't get the same deal.
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But they pay less tax in the first place!?
 
ClubMan said:
But they pay less tax in the first place!?
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They do...but a system where the government topped up your contributions rather than not charging you tax on your contributions would make it possible.
 
KalEl said:
Doeas anyone know for sure...I thought an employer contributing the 10.75% as a gesture of goodwill was perfectly fine (and cost neutral)?
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That's certainly how it worked out for me in the past and I presume that it was not a mistake. Employer 10.75% PRSI "saving" on my contributions put into my (employer scheme) PRSA.
 
ClubMan said:
That's certainly how it worked out for me in the past and I presume that it was not a mistake. Employer 10.75% PRSI "saving" on my contributions put into my (employer scheme) PRSA.
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Same for me...we do it for our employees also. There's no way it could be slipping by all our radars (and those of our accountants!)
 
KalEl said:
Same for me...we do it for our employees also. There's no way it could be slipping by all our radars (and those of our accountants!)
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I had to explain it to the accountant in my last job just as I had to explain the difference between weekly and monthly PRSI exemption amounts (€127 versus €551). I had to explain to the accountants in the current job that they should not be deducting BIK income tax and PRSI at source on ESPP nominal income (Employer deduction of BIK tax/PRSI on share options). I hope I was right! :D
 
CapitalCCC said:
Yes it would be a BIK to a personal pension but not to a PRSA.
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Thanks folks for all the discussion but am still as confused. Is there any site I can be directed to that can either confirm or refute the above. Revenue maintains employers contribution to my PRSA would be a BIK but she was a little hesitant and unsure.
 
But even if it was a BIK then it should be trated as if you made the contribution personally and accordingly the tax-relief should offset the BIK!
 
Back to this again. As contributing to an employee's PRSA is a totally new thing with my employer the Boss has asked me to provide a summary of what other companies are contributing to their employees pensions as a guideline.

While I realise this is a private issue for people, I had hoped, given the anonymity of this page, that some of you out there might provide me with the following (a) how much (either % or amount) your employer is contributing to your pension and (b) company name (I would need this to verify to the Directors that I am not just pulling figures out of hats).
 
In the past I have worked for employers who matched/contributed 0%, 3%, 5% and 6%. It varies a lot. My current employer matches/contributes 3%.
 
Happy Girl said:
some of you out there might provide me with the following (a) how much (either % or amount) your employer is contributing to your pension and (b) company name (I would need this to verify to the Directors that I am not just pulling figures out of hats).
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I'm not sure if it is appropriate for you to ask other AAM users to publicly divulge these details to you. If anyone is naive enough to do so, they could well end up getting themselves into trouble with their employer, for example if their pay and conditions are subject to a confidentiality clause, or if they have breached their employer's internet usage policies by logging on to AAM at work.

Go to the likes of IBEC or ISME for such information if you really need it.
 
ubiquitous said:
for example if their pay and conditions are subject to a confidentiality clause
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Do some people really have confidentiality clauses covering this sort of stuff? My contract certainly does not and confidentiality clauses preventing people from telling others what they earn or what their other benefits are would seem very restrictive.
or if they have breached their employer's internet usage policies by logging on to AAM at work.
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But that would surely apply to any post on AAM so why post that here specifically?
 
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