Position of UK/Ireland schemes under the EU IORPS Directive

Position of UK/Ireland schemes under the EU IORPS Directive

Friday 12 August 2005:For purposes of Irish regulation, a UK/Ireland scheme is a scheme registered in Ireland which has members in the UK. Formerly, employers based in Ireland were permitted to have their UK based employees (whether working in a UK subsidiary or in a UK branch) included as members of the Irish registered pension scheme rather than requiring a separate UK scheme to be established for such individuals. Reciprocal provisions applied in the case of UK employers with employees in Ireland. Since 1994, no new UK/Ireland schemes could be established. However, UK/Ireland schemes in existence prior to that date may continue to operate and accept new members. Currently these schemes are regulated, for Irish purposes, under Occupational Pension Schemes (Schemes with External Members) (United Kingdom) Regulations 2000, S.I. No.470 of 2000.

Article 20 of Directive 2003/41 on the Activities and Supervision of Institutions for Occupational Retirement Provision (commonly known as the IORPs Directive) requires schemes which engage in cross-border activities to receive a prior authorisation and to fulfil certain ongoing conditions. There is a possibility that UK/Ireland schemes come within the scope of this Article.

The UK and Irish authorities are currently in discussions with the European Commission to determine whether, and, if so, how the requirements of Article 20 of the Directive should apply to UK/Ireland schemes. We do not expect that these discussions will be finalised by the 23 September 2005, the date by which the Directive is required to be implemented into national law. We have advised the Commission that Ireland will continue to allow UK/Ireland schemes to operate “as is” and without regard to the provisions of Article 20 of the IORPs Directive until we receive concluded advice from the Commission as to whether or not such schemes come within the scope of Article 20.

31 August, 2005

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About the Pension’s Calculator

  • This pension’s calculator is designed to give a broad indication of the level of contributions required to give your desired pension at your retirement age. This calculator only provides a sample indication of the funding contributions for your pension and no reliance should be placed on it.
  • This calculator does not take into account any contributions an employer might make to your pension.
  • Do you know that contributions paid to a pension scheme will benefit from income tax relief at your highest rate of income tax? This calculator takes into account current income tax relief benefits.
  • For a full and accurate assessment of your personal finances and any tax relief you may be entitled to on your pension contributions always consult with a professional financial adviser

The next step is to talk to your employer, trade union, bank, insurance company, building society or financial advisor about starting your pension today.

Pension Calculator Notes:
  1. Assumptions used: Investment return will be 5% per year before retirement and 4% per year after retirement. Salary will increase at 3% per year. Pension will increase at 2% per year in retirement. The State Pension will increase in line with salary increases. Spouse's annuity assumes a 3 year age gap between the Main Life and Spouse. Your personal illustration above makes an approximate allowance for the recently introduced Pensions Levy (i.e. 0.6% of your Fund Value) until 2014 or your intended retirement year if earlier.
  2. Contribution amounts shown will increase each year as salary increases.
  3. The actual pension at retirement will depend on actual investment return and salary inflation up to retirement and on the cost of purchasing annuities at retirement.
  4. Tax relief calculations take account of age related limits on tax relief in any given year as prescribed by the Revenue. Your financial advisor will be able to help you to stay within your limits. The maximum tax relief as a % of earnings are as follows:
         Under 30: 15%
         30 to 39: 20%
         40 to 49: 25%
         50 to 54: 30%
         55 to 59: 35%
         60 and over: 40%
  5. Contributions or benefits may exceed limits prescribed by the Revenue. Your financial advisor will be able to help you to stay within your limits. Budget 2011, introduced a Standard Fund Threshold (SFT) of €2.3 million. Individuals with pension funds in excess of this value as at 7 December 2010 may apply for a Personal Fund Threshold(PFT). When the capital value of pension benefits drawn down by an individual exceed his or her SFT or PFT as appropriate, a tax charge of 41% is applied to the excess fund.
  6. In these net contribution calculations, PAYE & single persons tax reliefs and single persons tax bands are assumed. It is also assumed that no other tax reliefs apply.
  7. The annuity rate used to convert your pension fund at retirement age is a long term average annuity rate, which makes no allowance for the recent gender equalisation ruling. The annuity rate used in your personal illustration above will be shown when you run the calculator.
  8. This calculator takes account of the fact that the State Pension (Transition) will no longer be paid from 1 January 2014. This means that there will then be a standard State Pension age of 66 years for everyone. If you have qualified for the State Pension Transition before 1 January 2014 you remain entitled to it for the duration of your claim (1 year). State pension age will increase to 67 in 2021 and to 68 in 2028