CTC Pension Scheme
The Community Training Centre’s Pension Scheme commenced on 1st July 1992 to provide retirement benefits for Members and their dependants. This explanatory booklet supersedes any booklets previously issued.
This booklet has been prepared to explain to you, simply and concisely, the various benefits of the Scheme. You should bear in mind that it cannot overrule the Trust Deed and Rules governing the Scheme.
The Scheme is set up under Trust and the assets of the Scheme are separate from CTC assets in order to provide your benefits with maximum security.
Separate identical Schemes have been set up for each individual Community Training Centre and reference to Scheme, Rules, Policies etc relate to the scheme for your particular Community Training Centre.
The main purposes of the scheme are:
- To give you an income when you reach retirement age, or if you retire early
- To provide you with a tax free cash sum on retirement
To give your dependants life assurance benefits in the event of your death while you are employed by the CTC
Some of the terms and expressions used in this booklet have special meaning. These terms are explained below:
Normal pension date is your 65th birthday.
Membership of the Scheme is a condition for all permanent employees under the age of 65.
All employees will join from the date they become permanent
is your annual basic salary on the 1st July each year
Means whichever is the greatest of:
- Total remuneration for any one of the five years immediately preceding Normal Pension Date;
- The yearly average of the total actual emoluments for any three or more consecutive years of Service ending not earlier than ten years before Normal Pension Date;
- The annual rate of fixed salary or wages at the date of retirement.
Dependant means any of the following
- your wife/husband
- your children under 18 years of age and those over 18 if in full time education;
- any person who, immediately before your death, was wholly or partly dependent on you for the provision of the ordinary necessaries of life.
means service whilst a member of the Scheme for pension benefits, including any similar service transferred in from another occupational pension plan.
The Scheme is a defined contribution scheme for the purposes of the Pensions Act 1990. This means your retirement benefits are based on the contributions paid by you and your employer to the Scheme.
The current level of contributions payable are as follows:
Employer’s Contributions: 6.5% of Pensionable Salary Employee’s Contributions: 3.5% of Pensionable Salary These contributions are invested in an individual retirement account held for you, and can only be used to provide you with retirement benefits under the Scheme.
Additional Voluntary Contributions
You should give serious consideration to paying Additional Voluntary Contributions (AVC) to increase your fund and consequently your benefits on retirement.
If you make AVCs you may be able to increase your tax-free cash or pension, and avail of a wide range of retirement options which are described later in this booklet.
Any AVCs you make will be deducted from your salary together with your regular contributions, and will automatically receive full tax and PRSI relief, up to the limits set out below:
Age Maximum Contributions
- Up to — 29 15% of Remuneration
- 30 up to 39 20% of Remuneration
- 40 up to 49 25% of Remuneration
- 50 up to 54 30% of Remuneration
- 55 up to 59 35% of Remuneration
- 60 + 40% of Remuneration
Certain other restrictions on reliefs apply and these will be advised to you if you are affected by them. If you would like to make AVCs you should complete the application form at the back of this booklet and return it to Halligan Life & Pensions Ltd
Death in Service
In the event of your death, whilst in the service of the Employer, the value of your individual retirement account plus an insured Death-in-Service benefit of one and a half times your Pensionable Salary, at the previous renewal date, will be paid.
Payment of the insured Death-in-Service benefit is subject to New Ireland Assurance Company’s underwriting requirements. (The Revenue maximum amount that can be paid in lump sum cash form is four times your remuneration at the date of your death together with the value of your own contributions to the Scheme.)
The Trustees of the Scheme will decide to whom the benefit will be paid, and it can be paid to your estate or one or more dependants. You may wish to assist the Trustees in exercising their discretion by indicating the person or persons to whom you wish the lump sum to be paid, on the attached Nomination Form.
The primary purpose of this Scheme is to help you save for your retirement. It is our understanding of current legislation that your options when you retire may include:
- Taking a tax-free lump sum. When you retire you may be able to take a tax-free cash lump sum of up to 1.5 times your final salary.
- using your individual retirement account to purchase a pension for life after retirement, with the option for it to continue to your spouse on your death in retirement.
- Investing the value of your additional voluntary contributions funds in an Approved Retirement Fund (ARF) or in an Approved Minimum Retirement Fund (AMRF).
- Taking your additional voluntary contributions as a taxable lump sum
- A combination of the above. In order to take a taxable lump sum or invest in an ARF you must have a guaranteed income for life of more than €12,700 each year. If not, then you must either use €63,500 to purchase a pension or invest in an AMRF, the capital of which cannot be drawn on until age 75.
All options will be discussed with you on your retirement.
In certain circumstances (or if you are over age 50) you may be able to retire early and receive immediate benefits from the Scheme. However, early retirement is subject to the agreement of the Employer and you should note that no State Pension is payable until you reach age 65. If your Employer agrees to your early retirement you will receive a reduced pension based on the value of your individual retirement account at that time. You will also have the option to take part of your benefits in the form of a tax free lump sum; and, if you have made Additional Voluntary Contributions, to avail of the other retirement options described above.
The most important factor influencing a successful investment strategy for your individual retirement account is the length of time until your retirement. What may be a successful strategy for a person with a long time to go until retirement is not appropriate for someone with a shorter term. Therefore, the trustees are investing the contributions paid to the Scheme in New Ireland’s Consenus Fund for Individual Retirement Investment Service (IRIS).
Consenus IRIS Fund – How does it work?
A pension plan is generally a long term investment and therefore in the early years the investment strategy should be geared towards achieving high real rates of growth through investment in assets such as equities and property. However, as the retirement date approaches, it is important to protect your imminent pension requirements by investing in less volatile assets such as gilts and cash.
The Consenus IRIS Fund tracks the investment market and consists of a series of different investment funds, allowing New Ireland to group together investors with similar terms until their expected retirement. This is crucial, as it means that investors with hugely different terms to retirement are not mixed up in a single fund which has to try and meet everyone’s investment requirements. So, for example, if you are expecting to retire in the years 2016 or 2017, your contributions would be invested in the Retirement Fund 2016-2017, which only contains investors with a similar term to retirement as yourself.
The investment strategy of your fund is designed with your term to retirement in mind. And, instead of you having to switch to a lower risk fund closer to retirement, the fund itself gradually changes its asset mix as your retirement date approaches, in order to protect the value of your individual retirement account.
Leaving Service before your Retirement
If you leave service, all contributions to the Scheme, payable by or in respect of you, will cease. In addition, any insured death-in-service benefit will cease. If you have completed 2 or more years Qualifying Service you are entitled (under the Pensions Act) to have your Scheme benefits preserved for you until retirement. The preserved benefit will be equal to the value of your individual retirement account. In the event of your death before retirement, the value of your preserved benefit, immediately before death, will be paid to your personal representatives. If you qualify for a preserved benefit you may request the Scheme trustees to transfer the value of your preserved benefit to either (i) your new employer’s pension plan or (ii) a pension plan in your own name, subject to certain restrictions.
If you have less than 2 years Qualifying Service you have a number of options. You may:
- request a refund of the value of any contributions paid by you to the Scheme (less 20% tax),
- leave your individual retirement account invested in the Scheme until Normal Pension Date, or
- transfer the value of your individual retirement account to a new employer’s pension plan or a pension plan in your own name.
If you request a refund of your contributions (option (i) above) you will lose your entitlement to the value of contributions paid to the Scheme by your employer. If you leave your benefits in the Scheme, they will continue to be invested in the Consensus IRIS Fund.
Judicial Separation & Divorce
If you are a married member, in the event of judicial separation or divorce, a court application for a pension adjustment order in respect of your pension and/or death in service benefits may be made, usually by your spouse. Further information about pension adjustment orders may be obtained from the Pensions Board.
Assignments of Benefits
You may not assign or otherwise dispose of your benefits under the Scheme, nor can any pension be attached by creditors for payment of debts.
Amendment or Discontinuance of the Scheme
Although it is intended that the Scheme will be continued in its present form, as a matter of normal commercial prudence, your Employer reserves the right to amend or terminate it at any time.
The Scheme has been tax exempt approved by the Revenue Commissioners under Chapter 1 of Part 30 of the Taxes Consolidations Act 1997 and has been registered with the Pensions Board. The Scheme’s Annual Report will detail the registration number. 9
All of the benefits under the Scheme are funded and provided by means of insurance policies which are specifically allocated to the provision of benefits for particular members.
As the Scheme has been exempt approved by the Revenue Commissioners, the following tax advantages apply to the Scheme:
- The contributions paid by the Employer will not be added to your salary and taxed as income
- Your own Contributions, and any AVCs you make, attract income tax and PRSI relief.
- Income earned on the Scheme’s investments (including AVCs) is tax-free.
- When you retire part of your pension may be exchanged for a tax-free cash sum.
- Your pension itself, however, will be taxed through PAYE in the same way as your normal pay, assuming you are required to pay tax.
Your benefits cannot exceed the maximum limits approved by the Revenue and you will be advised if your benefits have to be restricted in any way. The following sets out the maximum tax-free cash lump sum payable at retirement, based on years of service. Years of Service Maximum Tax-free cash as a Fraction of final remuneration.
- 9 30/80
- 10 36/80
- 11 42/80
- 12 48/80
- 13 54/80
- 14 63/80
- 15 72/80
- 16 81/80
- 17 90/80
- 18 99/80
- 19 108/80
- 20 or more 120/80
For More Details Contact Halligan Insurances – 01 8731033
If you have any query about the Scheme or your benefits you should contact the trustees, by writing to them at:
Halligan Life & Pensions Ltd,
16/17 Lr. O’Connell Street, Dublin 1.
If you have a complaint about the Scheme, you should follow the procedures set out in the Scheme’s Internal Dispute Resolution Procedure. A copy of the Scheme’s Internal Dispute Resolution Procedure is available from Halligan Life & Pensions, on request. The trustees will try to resolve your complaint to your satisfaction, subject to legislation and the Scheme’s trust and rules. If the complaint is not resolved to your satisfaction you can refer it to the Pensions Ombudsman. Details of the service provided by the Pensions Ombudsman may be obtained from www.pensionsombudsman.ie. The Pensions Ombudsman may be contacted at 36 Upper Mount Street, Dublin 2. Telephone (01) 6471650.