Group Personal Retirement Savings Accounts (PRSA’s)
Sections 121 and 123 of the Pensions Acts, 1990-2002 place obligations on employers to make Personal Retirement Savings Accounts (PRSAs) available to any employees who are not members of a group pension scheme or who need to wait longer than 6 months from the date of commencing employment to be admitted as members of the group pension scheme. If the employer does not operate a pension scheme, all of its employees are deemed to be excluded employees. Any employees that do not have the facility to make Additional Voluntary Contributions (AVCs) are also deemed to be excluded employees.
A PRSA is a personally held retirement account taken out by an individual with a PRSA Provider. A Group PRSA allows the individual to make contributions through their payroll and receive tax relief at source. It is designed to enable you to accumulate a pension fund, which is then used at retirement age to secure your retirement benefits. Contributions can be made to a PRSA by:
- The individual only
- The individual’s employer only, or
- The individual and the individual’s employer
There are two types of PRSA:
- A Standard PRSA is a very flexible Plan and the government has capped the charging structure to ensure the availability of a low cost retirement savings plan.
- A Non-Standard PRSA is also a very flexible Plan however, the charging structure is not capped. Generally the Non Standard PRSA offers you a greater investment choice.