Dáil Éireann Debate, Wednesday - 14 November 2012
178. Deputy Róisín Shortall asked the Minister for Social Protection the extent to which benefit in kind to an employee in the form of pension contributions by their employer is subject to employers and employee PRSI; and her estimate of the financial impact on the social insurance fund in the event of 10% of employee pension contributions switching to employer contributions. [50531/12]
View answerIn a Revenue Approved Occupational Pension Scheme the employer’s contribution is not considered to be a benefit-in-kind to the employee. In the case of a PRSA or an RAC, contributions made by an employer on behalf of an employee are treated as a benefit-in-kind of the employee. In Budget 2011 employee contributions to occupational pension schemes and other pension arrangements became subject to employee PRSI and the employer PRSI exemption for employee contributions was reduced to 50%. In Budget 2012 the 50% relief on employer PRSI for employee contributions was removed.
Contributing to a pension scheme is important to ensure that individuals have made adequate provision for a pension when they come to retire, rather than rely solely on the State pension.
The rules of each scheme determine the respective employer and employee pension contributions. There are no estimates available on the financial impact on the social insurance fund in the event of 10% of employee pension contributions switching to employer contributions.
