Revenue Approvals of Pension Schemes
Thu Jan 7 2021
In previous meetings between Brokers Ireland and the Department of Revenue, it has been noted that some key factors contributing to the delay in approval of schemes is the accuracy of the information they are receiving.
Please find below some of the re-occurring factors that may attribute to a delay when getting a scheme approved:
- Start Date of Service – This is potentially the most frequent issue. Sometimes it is a couple of months due to forgetting their start date, however Revenue do regularly see instances where it is years as a director may not have been in receipt of income from the offset, and also popping up now is any break in service which is not being account for in the funding. So, stressing the point of checking for continuous service or understanding the Schedule E requirement would be important for Directors.
- Correct Employer Details – The name on the pension policy not matching the registered employer with Revenue. For example, the correct employer details on the payslip so it goes to submission stage, but Revenue then advise this does not tally with their records somehow. This is usually occurring with bigger schemes with groups and when there are multiple companies that are linked, and not understanding the requirements for a third-party payor.
Also seeing cases where the employer was amalgamated over the course of the employment, the ordinary employee may have retained the benefit of service but because these details are not provided at submission stage it throws up the query at approval stage. (Probably a tougher one to spot).
There have also been cases where Members not being registered as an employee of the sponsoring employer.
- Retained Benefits – When there is a transfer in with a change of NRA for the scheme it is leaving, Revenue record that in their comments but the odd few do pop up. The detail on RBs is definitely still a factor, usually more so before issue and getting to Revenue. Revenue do get ones after where details are omitted, and often clients not realising Executive Pension Terms for the same employment should be confirmed.
- Incorrect Details – Putting incorrect details on approvals such as salary details, incorrect normal age of retirement on application and incorrect PPS number.
Revenue and Insurance Ireland have agreed that once applications have been registered with the pension’s authority, contributions to the proposed scheme may commence. If Revenue approval has not been received by six months from the date of the application, the contributions must be returned to the employer/member and a new application must be submitted.
When a transfer from a Revenue approved executive pension, arrangement is requested by the member, it may only take place once the application for Revenue approval has been submitted. In the unlikely event of Revenue approval not being received, the transferred fund must be returned from where it came from or be transferred into a personal retirement bond.
If there are any urgent cases such as the imminent retirement of members, Revenue will prioritise the applications when requested to do so by the life offices.
If you have any query in relation the Revenue approval of Pensions, please contact Pierce Friel by email at – firstname.lastname@example.org or contact Brokers Ireland at – 01 661 3067.