Review of Construction Federation Operatives Pension Scheme

Wednesday 28 September 2005: The Pensions Board was approached by SIPTU in relation to issues of concern to them in relation to the operation of the Construction Federation Operatives Pension Scheme (CFOPS). These issues related to perceived non-compliance on the part of some employers in the construction industry with regard to their obligations under the relevant Registered Agreement to register their employees as members of the CFOPS and to pay over the contributions due to the scheme in respect of their employees. Responsibility for various aspects of the scheme is distributed across a number of bodies with no single entity having overall responsibility for compliance enforcement. In these circumstances, the Pensions Board as the statutory regulator of occupational pension schemes agreed to arrange for a review of certain compliance aspects of the scheme. The Department of Enterprise, Trade and Employment also agreed to be a co-sponsor of this review.

A copy of the Terms of Reference is contained in the CFOPS Report. After due tendering process Mercer Human Resource Consulting were appointed to complete the Report and the process was overseen by a Steering Committee consisting of representatives of the Pensions Board, the Department of Enterprise, Trade and Employment, the Department of Social and Family Affairs, Irish Congress of Trade Unions and the Construction Industry Federation.

The Report has been sent to the Minister for Social and Family Affairs, the Minister for Enterprise, Trade and Employment and the Minister for Finance as the Report contains a number of substantial recommendations which relate to other Government departments, agencies and bodies and these are outside the Boards scope and influence. The Pensions Board will continue to carry out the monitoring and enforcement role which it has in relation to the CFOPS.

A copy of the Review of Construction Federation Operatives Pensions Scheme on behalf of The Pensions Board and The Department of Enterprise, Trade and Employment is attached.

 
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About the Pension’s Calculator

  • This pension’s calculator is designed to give a broad indication of the level of contributions required to give your desired pension at your retirement age. This calculator only provides a sample indication of the funding contributions for your pension and no reliance should be placed on it.
  • This calculator does not take into account any contributions an employer might make to your pension.
  • Do you know that contributions paid to a pension scheme will benefit from income tax relief at your highest rate of income tax? This calculator takes into account current income tax relief benefits.
  • For a full and accurate assessment of your personal finances and any tax relief you may be entitled to on your pension contributions always consult with a professional financial adviser

The next step is to talk to your employer, trade union, bank, insurance company, building society or financial advisor about starting your pension today.

Pension Calculator Notes:
  1. Assumptions used: Investment return will be 5% per year before retirement and 4% per year after retirement. Salary will increase at 3% per year. Pension will increase at 2% per year in retirement. The State Pension will increase in line with salary increases. Spouse's annuity assumes a 3 year age gap between the Main Life and Spouse. Your personal illustration above makes an approximate allowance for the recently introduced Pensions Levy (i.e. 0.6% of your Fund Value) until 2014 or your intended retirement year if earlier.
  2. Contribution amounts shown will increase each year as salary increases.
  3. The actual pension at retirement will depend on actual investment return and salary inflation up to retirement and on the cost of purchasing annuities at retirement.
  4. Tax relief calculations take account of age related limits on tax relief in any given year as prescribed by the Revenue. Your financial advisor will be able to help you to stay within your limits. The maximum tax relief as a % of earnings are as follows:
         Under 30: 15%
         30 to 39: 20%
         40 to 49: 25%
         50 to 54: 30%
         55 to 59: 35%
         60 and over: 40%
  5. Contributions or benefits may exceed limits prescribed by the Revenue. Your financial advisor will be able to help you to stay within your limits. Budget 2011, introduced a Standard Fund Threshold (SFT) of €2.3 million. Individuals with pension funds in excess of this value as at 7 December 2010 may apply for a Personal Fund Threshold(PFT). When the capital value of pension benefits drawn down by an individual exceed his or her SFT or PFT as appropriate, a tax charge of 41% is applied to the excess fund.
  6. In these net contribution calculations, PAYE & single persons tax reliefs and single persons tax bands are assumed. It is also assumed that no other tax reliefs apply.
  7. The annuity rate used to convert your pension fund at retirement age is a long term average annuity rate, which makes no allowance for the recent gender equalisation ruling. The annuity rate used in your personal illustration above will be shown when you run the calculator.
  8. This calculator takes account of the fact that the State Pension (Transition) will no longer be paid from 1 January 2014. This means that there will then be a standard State Pension age of 66 years for everyone. If you have qualified for the State Pension Transition before 1 January 2014 you remain entitled to it for the duration of your claim (1 year). State pension age will increase to 67 in 2021 and to 68 in 2028