Company pensions are rewarding pension schemes where employers provide a straightforward way for their employees to save for retirement.

Not only do company pensions boost an employee’s retirement savings, but there are also tax benefits for both employees and employers who contribute.

Company Pensions

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How Company Pensions Work in Ireland

Company pension schemes are set up by an employer to allow employees to contribute a percentage of their salary towards their retirement savings. 

The employer may also decide to contribute a percentage towards the pension, and in many cases they match their employee’s contributions 1-to-1. These contributions are invested in a fund which aims to grow over time.

Employees can then access these funds when they retire in addition to the State Pension, and they may take out a tax-free lump sum of up to €200,000 from 60 years (or 50 in some cases).

Types of Company Pensions Available in Ireland

There are two main types of company pensions in Ireland:

This is where the employer promises a set retirement income based on salary and years of service.

Employers and employees contribute to a pot that grows over time and the final value depends on investment performance.

Group PRSAs

Group PRSAs are company pensions that are set up by the employer, but are structured under PRSA rules. These are commonly used by small and medium businesses which have no formal scheme. In recent years they have increased in popularity. 

The benefits of Group PRSAs include:

  • Low administration or set-up fees for employers
  • Employees have flexibility over contributions
  • PRSAs move with employees if they change job
  • Strong regulation means fixed, low-cost fees (for Standard PRSAs)

Master Trusts

Master trusts are more uncommon than traditional workplace pensions, but they are also growing in popularity. They are defined contribution savings schemes which can be used by multiple employers, reducing costs and simplifying management. 

Master trusts are particularly attractive to smaller businesses because of strong governance standards, low member costs, and a range of investment options.

When can employees cash in their company pension?

Employees can usually cash in company pensions from the age of 60, accessing a 25% tax free lump sum of their total pension pot up to €200,000.

After this ceiling is reached, you are taxed at the 20% rate for the next €300,000. Anything that remains must be invested in an Approved Retirement Fund (ARF).

In some cases, early access may be allowed from age 50 for those who have left employment.

Benefits of Company Pensions for Employers

There are many benefits of setting up a company pension for employers in Ireland including worker satisfaction and retention, recruitment, tax incentives, and gaining an advantage over competitors.

Providing a company pension plan helps employees feel satisfied in their workplace and recognise that their contribution to the company is valued. When an employer contributes to their workers’ pension, they are investing in themselves.

Operating a company pension scheme will help in attracting employees. New talent may not have an existing pension plan so the provision of one is a definite incentive when considering whether to work for a company.

Employers offering a company pension scheme can receive tax relief on contributions made into a scheme. The amount of relief is determined by the type of scheme that you enter into. The company’s contributions are completely tax deductible for corporation tax purposes.

Offering a company pension plan is a clear competitive advantage that employees recognise and value. For employees, it separates companies which appear committed to their employees from those who merely say they are. It is a clear signal to an employee that the company values them and their future.

Benefits of a company pension

Benefits of Company Pensions for Employees

Company pensions also offer a number of benefits for employees, such as tax relief, employer contributions and regular, automatic contributions.

Contributions to an occupational pension scheme qualify for income tax relief at your marginal tax rate. This means that contributions to a company pension is an extremely tax-efficient way of saving for retirement. There is no tax relief on PRSI or USC.

Many employers will contribute to your company pension scheme which can significantly increase the growth of your retirement savings over time.

Consistent and regular pension contributions are among the most important factors that will determine the growth of your retirement savings. With a company pension, your contributions are taken straight out of your salary, which means you will be contributing to your future automatically, without any additional effort.

Auto Enrolment

Auto-enrolment was brought in on 1 January 2026, bringing hundreds of thousands of workers into workplace pension schemes for the first time. 

Employees who were not contributing to a company pension have been automatically enrolled in this scheme, officially titled MyFutureFund. They contribute a percentage of their salary which must be matched by their employer, with the State topping up contributions. 

Read more about automatic enrolment here.

Company Pension FAQs

A deferred member refers to someone who has left their employer but retains the benefits associated with their company pension, which remains invested until they reach retirement age.

Yes, company pensions offer employees tax relief at their marginal tax rate which reduces their taxable income while they save for retirement.

No, your pension benefits remain invested even if you lose your job or move to a different company. You may be able to transfer your pension to a new plan.

Contributions qualify for tax relief, meaning a percentage of what you would have paid as tax goes towards your retirement savings. Employer contributions are also typically paid gross.

Many company pensions will offer a range of options for employees to choose where their money is invested, allowing people to choose their desired risk profile and fund type.

Your rights in a company pension include access to your pension benefits when you retire, investment choices, and the right to transfer or defer your pension.

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