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Pension Provisions.

Dáil Éireann Debate, Wednesday - 11 February 2004

Wednesday, 11 February 2004

Ceisteanna (76)

Dan Boyle

Ceist:

132 Mr. Boyle asked the Minister for Social and Family Affairs if the introduction of PRSAs has been accompanied by the creation of a subsidy to employers who see their PRSI contributions reduced, even if they do not contribute to an employee's PRSA. [4026/04]

Amharc ar fhreagra

Freagraí scríofa

The Government is anxious to encourage employees and others to supplement their social welfare pension entitlement with personal or occupational pensions cover. In this regard, the aim is to increase such coverage from a current level of about 50% of employees to 70% in accordance with the targets suggested in the national pensions policy initiative.

Membership of personal and occupational pension schemes is promoted and encouraged by favourable tax and social insurance treatment. Contributions to pension schemes are, subject to certain limits, free of income tax and social insurance contributions. In practice, income tax and other contributions are levied on net income after pension contributions are deducted.

This arrangement also applies to personal retirement savings accounts, PRSAs. In the circumstances, where an employee is making a contribution to a PRSA or other pension arrangement, the amount of the contribution is not subject to a social insurance contribution and this does result in some savings for an employer. I would, of course, encourage employers to pass on such savings to employees in the form of additional contributions to PRSAs and other types of pension scheme.

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