Tuesday, March 28, 2017

Employers’ obligations to provide access to a PRSA

Which employers must offer PRSAs?
All employers are required to enter a contract with a PRSA provider to provide access to at least one Standard PRSA for all ‘excluded employees’.
An employee is considered an ‘excluded employee’ if
·         Their employer does not offer an occupational pension scheme,  or
·         They are included in an occupational pension scheme for death-in-service benefits only, or
·         They are not eligible to join the company’s occupational pension scheme or will not become eligible to join the scheme within six months from the date they began work there, or
·         They are included in an occupational pension scheme that does not permit the payment of additional voluntary contributions (AVCS) by the members.

Does an employer have to contribute to PRSAs on behalf of their employees?
Employers may contribute to employees’ PRSAs, but are not obliged to do so.

What must an employer do to provide access to a Standard PRSA?
An employer must
·         Enter into a contract with a PRSA provider. There is no charge for doing this
·         Notify ‘excluded employees’ that they have a right to contribute to a Standard PRSA
·         Allow the PRSA provider or intermediary reasonable access to ‘excluded employees’ at their workplace
·         Allow reasonable paid leave of absence, subject to work requirements, so that ‘excluded employees’ can set up a Standard PRSA
·         Make deductions from payroll at the request of employees and remit these to the PRSA provider (employers cannot charge for deducting and remitting contributions)
·         Advise employees in writing (normally on their payslip) at least once a month of their total contribution including the employer’s contribution, if any.

If an employer has a small workforce of less than five employees, is access to a Standard PRSA still necessary?
Yes, all employers, regardless of the size of their workforce, must provide access to a Standard PRSA if those employees fall into the category of ‘excluded employees’.

If an employer has a number of part-time, fixed-term contract and seasonal employees, is access to a Standard PRSA for these employees still necessary? Yes, all employees, whatever their status, must be given access to a Standard PRSA if they fall into the category of ‘excluded employees’.
Does an employer have to provide access to a PRSA even though there is an occupational pension scheme in place?
No, provided all employees – including full-time, part-time, seasonal, temporary, contract or casual employees – are eligible to join the scheme for pension benefits within six months of joining employment and the scheme permits the payment of additional voluntary contributions (AVCs).
Even if there is only one excluded employee, the employer must provide them with access to a Standard PRSA.

What about additional voluntary contributions (AVCs)?
If an employer has an occupational pension scheme that does not allow employees to make AVCs, they must make a Standard PRSA available, either as part of the existing occupational pension scheme (this requires an amendment to the scheme rules) or as a separate AVC scheme.

If an employer enters into a contract with a PRSA provider, must their employees who want a PRSA take it out with that provider?
No, an employee can go to any authorised PRSA provider, but an employer is not obliged to make deductions from payroll for that employee. If an employee goes to another provider, they make their PRSA contributions directly, by direct debit or cheque.

Does an employer have to give any advice to employees in relation to PRSAs? No, but the employer must allow their PRSA provider or intermediary reasonable access to their employees to brief them on PRSAs.

Does an employer have any responsibility for the investment performance of PRSAs?
If your employer provides you with access to a Standard PRSA, your employer is not responsible for the investment performance of your PRSA.

Does the on-the-spot fine regime apply to employers?
Yes, employers may be subject to an on-the-spot fine if (a) they fail to respond to a request by the Pensions Authority to furnish information about their provision of access to a Standard PRSA for ‘excluded employees’ and (b) they do not provide at least once a month a statement to employees showing employee contributions deducted and employer contributions paid in the previous month.

For further information you can contact Michael on 086 844 0541, email info@mkfinancial.ie or you can log on to the Pensions Authority website (www.pensionsauthority.ie)

Michael Keville T/A MK Financial is regulated by the Central Bank of Ireland

Tuesday, March 14, 2017

Hot Topic #27: Pensions on separation and divorce

The pension entitlements of you and your spouse arising from occupational or personal pension arrangements may be affected by separation or divorce.
If you or your spouse have been in a pension arrangement for some time, pensions could be a very significant part of your family assets.
If you have children or other dependants, you should also consider what would happen were you or your ex-spouse to die.
Pension rights cannot be shared out without a court order - a separation agreement cannot share out pension rights.
You should bear in mind that you and your dependants may have benefit entitlements from both your own arrangement, and your spouse's arrangement.

Family Law
The Family Law Act 1995 sets out the treatment of pensions in cases of judicial separation...

Splitting pension benefits
In recognising the value of pension benefits on separation or divorce, the court may require a proportion of your pension benefits to be paid to your spouse...

Pension adjustment orders (PAOs)
The court may serve a binding order, known as a Pension Adjustment Order on the trustees or provider of a pension arrangement...

Designated benefit
Where the court decides to make a PAO in relation to retirement benefits...

Retirement benefits
Retirement benefits are benefits payable to the member of the pension scheme on retirement or earlier withdrawal of service...

Payment of designated retirement benefit
Payment of the designated benefit would generally commence when the remainder of the retirement benefit starts to be paid to the member spouse...

Contingent benefits
Contingent benefits are the benefits payable if a scheme member dies during employment...

Civil partners and qualified cohabitants
The Civil Partnership and Certain Rights and Obligations of Cohabitants Act, 2010 entered into force on 1 January 2011...

Impact of death of a non-member
If a non-member who has been granted a designated benefit under a PAO dies...

Impact of death of member spouse
If a member dies (prior to any decision to transfer the designated benefit to another scheme or policy)...

Access to information
You are not automatically entitled to receive personal information on your spouse's pension benefits, although this will be provided to you if he or she consents.

If you would like further information please contact Michael on 086 844 0541, email info@mkfinancial.ie or you can log on to the Pensions Authority website (www.pensionsauthority.ie)
Michael Keville T/A MK Financial is regulated by the Central Bank of Ireland

Tuesday, December 6, 2016

Family Home Relief - Update

The much awaited changes to Family Home Relief under Section 86 Capital Acquisitions Tax Consolidation Act 2003 also known as Dwelling House Relief were published in the second amendments to the Finance Bill 2016 on Friday 4th November.

The whole section has been re-written with significant changes to the relief both for gifts and inheritances proposed.

The proposals provide that relief from inheritance tax will only be given under ‘family home relief’ if the disponer is living in the property at the date of their death. However if the disponer is absent from the property due to mental or physical infirmity this condition will not apply.
The proposals also include a change to the rules around beneficiaries owning additional property at the date of the inheritance which allows them to inherit an additional property at the same time as the dwelling house but still obtain relief from inheritance tax subject to the normal conditions applying.

Also proposed is that relief from gift tax is effectively almost abolished and will only be given if the property is gifted to a dependant relative which is defined as a relative who is ...

(a)    permanently and totally incapacitated by reason of mental or physical infirmity from maintaining himself or herself ...or...
(b) of the age of 65 years or over.

There have also been some other minor changes proposed around the conditions under which it is acceptable for a beneficiary to cease to occupy the house after the inheritance / gift, for example the concession that if a beneficiary leaves the property as a result of requiring long term care, has been tightened up and also the age at which the concession applies has been increased to age 65 from age 55.

There is still a considerable amount of discussion and lobbying around the changes and there could be some changes before they are finalised.

When the new legislation is finalised on the passing of the Finance Act, we will update you fully.
Source:  Irish Life plc, Life Advisory Services (November 2016)

Michael Keville T/A MK Financial is regulated by the Central Bank of Ireland

Tuesday, November 29, 2016

Life Protection – Health Status Q & A

How does my health status affect the premiums I pay for Life Assurance?

The premiums you pay for your life assurance policy is partly decided by your current health status.
Knowing your medical history helps the company work out how much you should pay for your cover.
It also lets them give a fairer price to all customers. It is important that you do not leave out any essential information, such as a pre-existing condition, that might have an impact on this.
It is also important to be honest as non-disclosure can render a policy void and the insurance company are not obliged to pay out on the policy.
Your health information is personal and sensitive and all details are confidential to the Life Company.  They are only shared them with the people who manage your plan.

Should I still apply for Life Assurance if I have an existing medical condition?

Yes. You might be refused cover depending on your condition but  your medical history and personal details will always be reviewed before any decision is made.
You may be offered life assurance at an increased price or with a medical exclusion.
This means that you may get cover on the understanding that you cannot make any claim for your existing condition.

Why are Life Companies concerned with my medical condition when my doctor may not be?

If you have a medical problem that does not need immediate attention, your doctor may not take any action.
They will only act if and when your condition gets more serious or if there are any complications. In that case, they will start treatment or carry out tests.
However, when your health is being assessed for Life Cover there is only a narrow window of time to consider your condition and predict now it may change in the future.

Do I need to take a medical examination or get a report from my GP and if so, will I have to pay for it?

Medicals reports, examinations and tests help the Underwriters make an informed decision about whether or not you can be offered cover.
If you need to take a medical examination, or get a report from your GP, this is usually arranged by the Insurance Company who also pay for any medical reports, examinations or other tests which may be asked for.

If you would like further information please contact Michael on 086 8440541 or email info@mkfinancial.ie .

Michael Keville T/A MK Financial is regulated by the Central Bank of Ireland.

Wednesday, November 16, 2016

Update 17th November : Life Protection – the Basics

What types of life protection are most commonly offered?
There are four main types of protection to give you and your family a lump sum or a regular income in the event of an illness, accident or death:
·         Life Assurance
·         Mortgage Protection
·         Income Protection
·         Specified Illness cover
You can choose and combine these plans according to your needs
What is Life Assurance?
Life assurance gives your family a cash payment if you die during the term of your plan. Your family can use this money however they choose. There are different types of life assurance:
·         Whole of life cover lasts until you die or for as long as you decide to make your monthly payments. Your payments can be increased throughout the life of your plan to make sure you get the lump sum you want.
·         Term life cover is a policy you pay for over a specified period. You can also use it to provide life cover during the term of your mortgage.
·         Mortgage protection is a lump sum paid on your death, or that of your spouse, to help your loved ones pay off the outstanding balance on your mortgage.  Mortgage lenders usually require you to have mortgage protection in place for the length of your mortgage. We offer mortgage protection plans that cover just you, or that include both you and your partner/spouse.

What is Income Protection?
Income protection provides you with a replacement income if an accident or illness affects your ability to work and earn a living, for a period longer than 4 weeks.
You get regular payments that begin after you have been on sick leave for a certain period of time. This is called a deferred period and you choose whether you want to set it to 4, 13, 26 or 52 weeks when you are setting up your policy.

What is Specified Illness Cover?
Specified illness cover is a health insurance plan. It provides you with a cash payment if you are diagnosed with any of a specific list of illnesses, including Alzheimers, cancer, cardiac arrest, multiple sclerosis or stroke.
You can take out specified illness cover alone, or combine it with life assurance to increase your protection

What is Accelerated Specified Illness Cover?
Accelerated Specified Illness cover is life assurance and specified illness cover in a single policy.
If you make a specified illness claim under this type of policy, the amount of money paid out on your death will be reduced by the amount you have already claimed.

If you would like further information please contact Michael on 086 8440541 or email info@mkfinancial.ie .

Michael Keville T/A MK Financial is regulated by the Central Bank of Ireland.

Wednesday, November 9, 2016

Update 9th November - Life Cover – Protect what matters most

Who knows what will happen next in our lives!
We always hope it will be something good, but nothing is certain in life. Fortunately, it’s possible to protect yourself from some of the financial uncertainties that come with unexpected events in your life.

Sudden or untimely death is not as rare as you think

·         Approximately 10,000 people die each year from cardiovascular disease including coronary heart disease and stroke. It’s the most common cause of death in Ireland, accounting for 36% of all deaths**.

·         One in three people in Ireland will develop cancer during their lifetime, and an average of 30,000 cases of cancer are diagnosed each year. Cancer is the second most common cause of death in Ireland, and accounts for over one quarter of the annual death toll.*
                * Cancer.ie, January 2014
                ** Irish Heart Foundation, January 2014

The unfortunate reality is that when you die, taxes, bills, mortgages, loans, education and grocery bills don’t stop and life must go on for your loved ones.

Affordable Peace of Mind
Life Cover is a lot more affordable, flexible and accessible get than you might think. You simply choose the level of cover that fits you and your family’s needs and the level of payments you can afford to make. You choose the length of time you want the cover to last and the amount of the lump sum that your family would receive if you were to die while the cover was in place.

Sample Life Cover Quote (subject to normal underwriting conditions)
€19.41 per month (approx. 64c per day)
20 year term
€200,000 Total Life Cover
Cover for one person, non-smoker, age 37
 Very little money for complete peace of mind!

Wednesday, November 2, 2016

Update 2nd November - What is income protection?

Income protection provides a replacement income if you cannot work due to illness or injury after a certain period of time.
How it works …
·         You must be in full-time paid work as a self-employed person, an employee or a company director to qualify for income protection.
·         Your occupation, health status and age could also affect your eligibility for the cover.
·         As a company director or employer, you can also offer group income protection to your full-time staff.
·         Decide how much of your income you want to protect. This depends on your salary, your sick pay arrangements and the amount of money you need to pay your bills and maintain your lifestyle. You can insure up to 75% of your normal income up to a maximum benefit of €262,500, less any social welfare payments.
·         Decide when you want your income protection to start.  The time between the start of your sick leave and your first income protection payment is called your deferred period. You decide whether it should be 13, 26 or 52 weeks. For example, if your employer will pay you for 6 months, go for a deferred period of 26 weeks. The longer your deferred period, the cheaper the cost of your income protection policy.
·         Decide how you want to manage your payments
Your options …
Guaranteed Premium

·         Your premium level is set and does not change
·         Your benefit level is set and does not change
Reviewable Premium
  • Your premium can be reviewed every 5 years, which will give you an option of an increase in premium or a reduction in benefit
·         You can choose indexation on both of these options. This will make sure that your benefit increases as the cost of living goes up. Just remember, if your benefit increases, so will your premium.
Decide how long you want to keep your income protection. Many people keep their income protection until they retire. But you can pick any age between 55 and 70.
What it costs
How much you pay each month depends on:
  • Your age
  • Your occupation
  • Your health status
  • Whether you are a smoker
  • How much of your income you want to protect
  • Deferred period
It won’t increase if you make a claim and you can claim tax relief on what you pay.        
We at MK Financial will take you through all of the above decisions and can then recommend the best plan to suit your circumstances.
If you’d like more information, please give Michael a call on 086 8440541 or email info@mkfinancial.ie.

Michael Keville T/A MK Financial is regulated by the Central Bank of Ireland