Employer sponsored pension (including AVCs)

An occupational pension scheme is one that is set up by an employer to provide pension and other benefits for employees.

Your employer usually sets up the rules of the pension scheme and appoints trustees to look after it.

Your employer automatically takes contributions from your salary (if a contributory scheme) before working out income tax relief for you The income you get when you retire depends on whether your employer plan is a defined benefit plan or a defined contribution scheme.

Defined Benefit (DB)

With a defined benefit plan, the pension income and/or lump sum you get when you retire is related to your final salary and years of service with that employer.

With this type of plan, you can predict your pension income, based on your salary and years of service.


Your employer reserves the right to change the type of pension scheme offered and there is no guarantee that your defined benefit plan will be maintained.

Defined Contribution (DC)

With a defined contribution scheme, your ultimate retirement benefit depends on the value of your pension fund at retirement. when you come to retire.

The value of your pension fund will depends on (a) the level of the contributions paid in by you and your employer (b) the investment performance, or gains and losses, of the pension fund (c) the amount of fees and charges the pension investment company or provider applies.

Most employer sponsored arrangements and all personal pension plans and PRSAs are now set up as defined contribution plans. So the final value of your pension can only be estimated. When you retire, your pension may be less than you expected. So you need to examine the benefit statement that you receive each year from the trustees and regularly review your contributions to ensure they are adequate to provide the pension you want.

A Company sponsored pension arrangement may allow you to make Additional Voluntary Contributions(AVCs), If you are a public or civil servant, you may buy back “missing years”, through the Purchase of Noitonal Service Scheme. [You may also invest in AVCs but you are advised to check which provides the best guarantee of benefits and value for money].

You can claim benefits at 60 or 65. Some plans allow early retirement from age 50, with your employer’s consent.


Remember that if you retire early, your pension will normally be much lower than if you continued making contributions up to the expected retirement age for your pension plan.

If you have paid Pay Related Social Insurance (PRSI) during your working life, you may be entitled to a state pension at the age of 65, or 66 if you are self-employed. You should consider this when working out the best way to take your pension benefits. Check with the Department of Social and Family Affairs to see if you are entitled to a state pension.



The following article may be useful resource to assit you and your loved ones in developing your retirement plan and creating a secure and safe future for you and your family.

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