The Finance Bill, published on 10th October 2024, includes more information on the Auto-Enrolment Pension Scheme, now called “My Future Fund”. This has given some clarity to how the scheme will work. It has also give the start date of the scheme as the 30th of September 2025.

A summary of the new information is below: 

• No BIK on employer contributions. 
• No tax relief for employee contributions. 
• State contribution will be exempt from Income tax and USC. 
• Confirmation that drawdowns from the system will be similar to PRSA. 
• It will count towards the Standard Fund Threshold. 

It is important for employers to budget as this is going to be and additional cost that can’t be avoided. It is even more important for employees to know that the contribution rates are based of Gross Pay, but it will be taken from Net Pay without any tax relief. This will reduce their cash flow. 

See examples below:

Single Person

Married Person

Single Person

If you have any questions about these changes and how they may affect you please contact us.

Employer contributions to PRSAs

The Finance Bill contains important changes to pensions, these changes have added further complexity when the governments stated aim is to simplify pensions. Below is a summary of the changes that will take effect when the Finance Bill is enacted:

• An employer limit of 100% of the director’s/employee’s remuneration in the current year. 
• Employer PRSA contributions over this limit will be subject to BIK for the employee and may not be included by the employer as an expense. 
• The employer limit is not subject to the earnings cap of €115,000. 
• There is an allowance to use the prior year earnings where current year earnings are reduced due to sick leave and in some other limited circumstances. 
• There is no proposal to include a funding check at the point of retirement for PRSAs. 
• Employee and self-employed PRSA contributions continue to be subject to the existing limits of 15% - 40% of remuneration, subject to the earnings cap of €115,000. 
• Employee contributions do not appear to count towards the employer limit of 100% of remuneration.

For most clients the maximum funding rates that have always been available on company pensions provide sufficient opportunity to help clients meet their retirement goals.

While employer PRSA contributions have been reduced, they do still allow for higher contribution rates than were available pre-Finance Act 2022. PRSA clients currently paying in excess of the new Finance Act 2024 limits will need your support and advice to review their pension funding needs.

HR Implications and Preparations for Auto-enrolment 2025

The upcoming introduction of auto-enrolment in Ireland presents both challenges and opportunities for employers from a HR perspective. By conducting a thorough workplace assessment and preparing well in advance, organisations can ensure compliance and minimise disruption. Clear communication, careful planning, and policy updates will be essential in making this transition as seamless as possible for both employers and employees.

Employers should consider the following:

• Adequately Informing Employees 
• Align with Laws and Best Practices 
• Evaluating Costs 
• Considering Existing Pension Schemes 
• Additional Resources for Administration/Training/HR & Payroll 
• Review Employee Demographics of the current workforce 
• Clear Policies o Contracts of Employment

If you have any questions about these changes and how they may affect you please contact us.

Finance Bill 2024 - Important Payroll Reporting Requirements

The Finance Bill 2024 was published on 10th October 2024, introducing key legislative measures following the announcements in Budget 2025. This Bill clarifies and expands on specific payroll provisions that will directly impact employers. Our Payroll and Pensions teams break down the crucial areas of the Bill and how they will affect your business operations.  See detailed article here.

How can RBK help?

If you wish to discuss any aspect of the implementation of Automatic enrolment retirement savings system - “My Future Fund” within your business, please reach out to our Pensions and HR Solutions and Payroll Team:

• Patrick Keegan, Wealth Management Director (01) 6440100
• Yvonne Clarke, HR Solutions Manager - (090) 6480600
• Mary Byrne, Payroll Solutions Senior Manager - (090) 6480600

Disclaimer: While every effort has been made to ensure the accuracy of information within this publication is correct at the time of going to print, RBK do not accept any responsibility for any errors, omissions or misinformation whatsoever in this publication and shall have no liability whatsoever. The information contained in this publication is not intended to be an advice on any particular matter. No reader should act on the basis of any matter contained in this publication without appropriate professional advice.