Pensions (Amendment) Act 2002
NEW REQUIREMENTS FOR EMPLOYERS IN RELATION TO PENSIONS
ACCESS FOR EMPLOYEES TO PERSONAL RETIREMENT SAVINGS ACCOUNTS
This Act provides for the introduction of Personal Retirement Savings Accounts (PRSAs) and it is expected that these will be available from financial institutions early in 2003.
Employers who do not currently provide an occupational pension scheme for employees will be required by law to provide access for these employees to at least one Standard PRSA. Where employers operate an occupational pension scheme for employees but; the eligibility for membership of the scheme for retirement benefits does not cover all employees, or employees have to wait more than six months from joining the company to be included in the scheme for retirement benefits, or scheme members are provided with death in service benefits only, they will have to provide access for these employees to at least one Standard PRSA.
The obligation includes the employer entering into a contract with at least one PRSA provider; notifying employees of their right to contribute to a Standard PRSA; allowing PRSA providers reasonable access to employees to conclude a Standard PRSA contract; and, subject to work requirements, allowing employees reasonable paid leave of absence to make arrangements to establish a Standard PRSA. Employers will also be required to facilitate the deduction of contributions from wages and salaries and remit these to the PRSA providers, within 21 days following the month end in which the deduction was made, in respect of at least one Standard PRSA.
It will not be mandatory for either an employee or an employer to contribute to a PRSA.
These requirements are expected to take effect in the middle of 2003 and employers may wish to consult with their advisers in advance. A definite date in this regard will be announced early in 2003.