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What are the different types of pensions I can offer as an employer?
What are the different types of pensions I can offer as an employer?
Aine Kavanagh avatar
Written by Aine Kavanagh
Updated this week

There are a few different ways that employers can offer you pensions.

1) An employer can offer PRSA

This means they will facilitate you opening your own pension plan, as is required by every employer in Ireland, but they are not required to contribute any money towards it.

2) An employer can offer you a defined benefit (DB) scheme

This is one option where the employer does contribute money towards your pension. In a defined benefit scheme the employer contributes a specific amount of money towards your pension and this is guaranteed. Defined benefit schemes have become a more rare offering by employers in the last number of years.

3) Defined contribution (DC) scheme

This is another option where the employer can contribute money towards your pension. The big difference here is that you can contribute money towards your pension, and employers choose to match your contributions up to a certain amount.

Some benefits of this type of scheme are:

  • Your fees are likely to be lower mostly because there are more people on this scheme.

  • The scheme is overseen by professional, qualified trustees independent of the provider.

  • You can add money to your pension, and this is deducted from your gross pay, not your net pay, so it's tax deductible.

  • Your employer can choose to match the amount of money you put into your account (up to a certain point). For example, if you add 5% of your salary to your pension, your employer can choose to add another 5% on top of that into your savings.

With Kota, your employer scheme is a defined contribution scheme using the EMPOWER lifestyle Strategy. If you'd like to know more, book a demo with us.

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