Monday 11 December 2017: A new Sectoral Employment Order (SEO) for the construction industry took effect from 19 October 2017. This SEO imposes mandatory terms and conditions for certain categories of employees within the construction sector in relation to pensions.
The Pensions Authority wishes to highlight the pensions implications of the SEO for relevant employers and trustees and remind them of their legal obligations under the Pensions Act.
SEO pension provisions
The SEO obliges employers in the construction sector to provide statutory minimum pension entitlements for certain employees including operatives, craft workers and those employed by building firms and civil engineering firms.
The SEO mandates that the benefit levels of a pension scheme are required to be no less favourable than those provided under the Construction Workers' Pension Scheme (CWPS). Employers in the construction sector who are not currently providing pension benefits to employees can satisfy their obligation under the SEO by registering with CWPS or by an alternative arrangement that provides similar or better benefits.
The minimum employer and employee contribution rates provided under the SEO are as follows:
Employer: €26.63 per week
Employee: €17.76 per week
Total weekly €44.39
Death in service contributions
Employer: €1.11 per week
Employee: €1.11 per week
Total weekly: €2.22
Employer Pensions Act obligations
The Pensions Act requires an employer to pay all employee contributions deducted from an employee’s wages to the trustees of a pension scheme or another person on their behalf within 21 days from the end of the month in which the deduction was made.
The Pensions Act requires an employer who is required (whether under a contract of employment, the terms of a scheme or otherwise) to pay any sum on behalf of or in respect of an employee to the trustees of a defined contribution pension scheme or another person on their behalf within 21 days from the end of the month in which the deduction was made.
A failure to comply with these requirements is an offence under the Pensions Act and may be subject to prosecution.
Trustee Pensions Act obligations
The Pensions Act requires trustees to ensure, in so far as is reasonable, that contributions payable by the employer and members to a pension scheme are received. Trustees need to ensure they have appropriate mechanisms in place to verify that member and employer contributions due to their scheme have been received in accordance with the relevant statutory time periods.
Throughout 2018, the Pensions Authority will be closely monitoring activity in the construction sector arising from the SEO and will be actively checking compliance by relevant employers and trustees with the aforementioned Pensions Act obligations.
Frequently Asked Questions on the late remittance of contributions are available here.
For further information contact:
Head of Operations
The Pensions Authority
Tel: (01) 6131900