new jobs pension Q.

theTinker

I'm starting my career in software developing and I've recieved a contract from an organisation that i really like. I understand nearly it all but would like to clear up the pension part if you dont mind.
Ive read the pensionboards.ie site but the descriptions are a bit confusing.

The HR girl on the phone the contribution of my salary is 2.5% and they pay 13.5%.
-As far as i know since im only 21 all that i can have being put in is 15% so this 0.5% is too much no?

-Also after reading the pensions site, Can someone say if this is correct or not. If i leave my job before 2 years (beginning of job = beginning of pension scheme) then i only get the 2.5% ive been putting in and the 13.5% is kept by my employer?

-And if i may also question, my contract doesnt say anything about the contribution from the employer increasing as i get into the older more tax relief brackets, is this normal or should i ask the HR about this?

ircoha

theTinker wrote:

I'm starting my career in software developing and I've recieved a contract from an organisation that i really like. I understand nearly it all but would like to clear up the pension part if you dont mind.
Ive read the pensionboards.ie site but the descriptions are a bit confusing.

The HR girl on the phone the contribution of my salary is 2.5% and they pay 13.5%.

-As far as i know since im only 21 all that i can have being put in is 15% so this 0.5% is too much no?akaik the 15% is your limit, there contribution level is unlimited, up to a point

-Also after reading the pensions site, Can someone say if this is correct or not. If i leave my job before 2 years (beginning of job = beginning of pension scheme) and you decide to cash in the pensionthen i only get the 2.5% ive been putting in and the 13.5% is kept by my employer?yes and your bit is also taxedur pension is transferable so dont worry about this 2 year thing, not if they are putting in 13.5%

-And if i may also question, my contract doesnt say anything about the contribution from the employer increasing as i get into the older more tax relief brackets, is this normal or should i ask the HR about this?

13.5% is pretty good and it will not be going up, why dont u put in more now? PM me with any other q's

rondjon

theTinker wrote:

The HR girl on the phone the contribution of my salary is 2.5% and they pay 13.5%.
-As far as i know since im only 21 all that i can have being put in is 15% so this 0.5% is too much no?

15% of your total gross salary is your current limit. This can be made up of any combination of company and personal contributions, but combined they can be no more than 15%.

theTinker wrote:

-Also after reading the pensions site, Can someone say if this is correct or not. If i leave my job before 2 years (beginning of job = beginning of pension scheme) then i only get the 2.5% ive been putting in and the 13.5% is kept by my employer?

You're correct in your question about leaving before 2 years have passed, assuming you cash in your pension. You should confirm this with HR though, because there are some companies who will let you keep their contribution even if you leave before your 2 years are up -assuming you're transferring it to another scheme.

With regards to your own contributions, if you transfer it to another scheme though, you will not have to pay tax on your 2.5%.

theTinker wrote:

-And if i may also question, my contract doesnt say anything about the contribution from the employer increasing as i get into the older more tax relief brackets, is this normal or should i ask the HR about this?

You should ask HR about this too. A lot of companies will increase the percentage of contributions as their employees get older. No harm in asking to find out.

ircoha wrote:

ur pension is transferable so dont worry about this 2 year thing, not if they are putting in 13.5%

I don't understand this ircoha. If you transfer your pension before 2 years service, depending on the t's & c's from the company, they may not allow you to transfer their contribution. So whether or not they're paying 13.5% doesn't mean anything - only if you stay after 2 years, which makes the 2 years thing something important to consider.

ircoha wrote:

13.5% is pretty good and it will not be going up, why dont u put in more now? PM me with any other q's

I don't thing you're correct here. If 13.5% is going in from the company, the OP can put in 1.5% max now. And whether or not it goes up as they get older, they should check with HR.

ircoha

http://www.pensionsboard.ie/index.asp?locID=318&docID=-1

rondjon:
AFAIK
The % limits are for the employee contributions, not for the employer contributions.

The limit includes the aggregate of your ordinary contribution (if any) to your employer’s scheme together with any AVCs you pay. The age related limits are as described below:

Age % of net relevant earnings
under 30 15%
30-39 20%
40-49 25%
50-54 30%
55-59 35%
60 and over 40%

There are no % limits on what the employer can put in.

I don't understand this ircoha. If you transfer your pension before 2 years service, depending on the t's & c's from the company, they may not allow you to transfer their contribution. So whether or not they're paying 13.5% doesn't mean anything - only if you stay after 2 years, which makes the 2 years thing something important to consider.

rondjon: You are correct on the legal position here.as set out below

You may be obliged if you have less than 2 years Qualifying Service when you leave service to take a refund of the value of your own contributions less tax at the basic rate. Some plans may permit you to leave your contributions in the plan even though they are not required to do so by law.

However as this can be used as a barrier to free movement of labour and a disincentive for people to start a pension, in practise, most schemes do not enforce it, hence my original comment.

However if u do encash before the end of the 2 years u only get ur own money back, less tax.