Page 2 - Group Insurance and Retirement Benefit IC 83 E- Book

A pension scheme is quite simply an arrangement that provides for payments to be made
to a worker on retirement from paid work, or to his/her dependants in the event of death.

The most common kind of pension scheme in Ireland is that provided for by the Social
Welfare Acts, which cover the provision of retirement and old age pensions to the

employed and the self-employed and spouses‘ pensions to their surviving marriage
partners. Occupational pension schemes are the name given to employer-sponsored

schemes for employees which are approved by the Revenue Commissioners under
various Finance and Income Tax Acts.

The term also includes scheme for employees in the various arms of the Public Sector,

which in many cases may not require Revenue approval and which are set up under
statutory provisions.

Under the Family Law Acts, the definition is widened to include pensions for the self
employed, annuities and buyout policies and any sort of pension promise, whether or not

it is funded.
This Topic concerned with occupational pension schemes and those which apply to the

self-employed.The Pensions Act, 1990 recognises two distinct types of scheme: A

Defined Benefit Scheme, in which the pensions and other benefits are clearly stated in the
rules of the scheme and promised to members and their dependants;

A Defined Contribution Scheme (also known as a Money Purchase Scheme), where the

benefits payable are determined solely by reference to the contributions paid into the
scheme and the investment return earned on those contributions – there is no specific

promise or guarantee of particular benefit levels, except perhaps on death.
Many of the questions contained in Sections 2 and 3 of this book have answers that are

common to both types of scheme. Because of the differences between the two types of
scheme and how they work, the questions dealing with the two types have been dealt with

separately. Before approaching Sections 2 and 3, therefore, it is important for readers to

be clear what kind of scheme they participate in. It is worth noting that, even where the
main pension scheme is a defined benefit scheme, a scheme or section of a scheme