In the first edition of Irish Building Magazine for 2025, Susan O'Mara writes. MODERN employers recognise occupational pensions as strategic tools for talent attraction and employee retention. In an evolving labour market where employees prioritise financial security, offering a robust pension scheme can significantly enhance an employer’s standing.

Enhancing Talent Attraction and Retention

With an increasingly ageing workforce and a competitive job market in Ireland, businesses must differentiate themselves to attract and retain top talent. Occupational pensions serve as a key differentiator, demonstrating an employer’s commitment to employees’ long-term financial well-being. In 2025, younger generations, particularly Millennials and Gen Z, are more aware of financial security, making pension benefits a crucial factor in job selection. For existing employees, a well-structured pension scheme fosters loyalty and reduces turnover. However, it is crucial that employers consistently highlight the value of their pension offering.

Highlighting the Value of Pension Schemes to Employees

For a pension scheme to have the maximum impact, employers must proactively communicate its value to employees from the outset and on an ongoing basis. Employees may not fully appreciate the long-term benefits of an occupational pension, so it is essential for employers to educate them about contributions, tax benefits, and potential investment growth.

Employers can achieve this by integrating pension education into the onboarding process, organising financial wellness workshops, and providing regular updates on pension performance. Clear communication about employer contributions and long-term retirement security can increase employee engagement and reinforce the value of the scheme. By continuously emphasising the benefits of occupational pensions, employers can drive participation and foster a culture of financial security within the workforce.

Compliance with Legal and Regulatory Requirements

Regulations surrounding workplace pensions in Ireland continue to evolve, making compliance a key concern for employers. The Irish government has now signed into law the introduction of their much-vaunted auto-enrolment pension scheme, called “My Future Fund.”
Eligibility for the scheme is for employees aged between 23 and 60 years who earn over €20,000 per year, unless they are already participants in another pension arrangement. Both employers and employees will be required to contribute to the scheme, beginning at a rate of 1.5% each, gradually increasing to 6% over a ten-year period.

Contributions are as follows:

*Employer contributions and the State top-up will be capped at a maximum €80,000 of an employee’s gross salary. (“Auto-enrolment retirement savings system for employees Pension Auto Enrolment” – www.gov.ie)

It should be noted that the State top-up is instead of tax relief, which while valuable, may not be as valuable to employees when they consider the impact of the gross deduction on their take home pay. Employers should consider highlighting the value of their own pension scheme over auto-enrolment if seeking to engage with employees who have not previously joined their pension scheme, on topics such as tax relief v state top ups. The AE scheme will not facilitate Additional Voluntary Contributions (AVCs). AVCs provide employees the opportunity to take control of their own retirement planning.

Employers, who previously not offered access to a pension scheme for their staff, or all of their staff have an opportunity to review their business needs and to put a plan in place that suits their business needs, while also taking advantage of the benefits of an occupational pension scheme when it comes to attracting and retaining employees.

Offering an occupational pension may be a competitive advantage in terms of overall compensation strategy. Pensions are a tax-efficient way to reward employees. In many cases, employer contributions to pensions receive favourable tax treatment, making them a cost-effective method for enhancing employee compensation without incurring excessive payroll tax liabilities.

Conclusion

In 2025, occupational pensions remain an essential element of a successful business strategy in Ireland. Employers who recognise the value of pension schemes can leverage them to attract and retain top talent, boost employee well-being and productivity, strengthen corporate reputation, and ensure regulatory compliance. By investing in occupational pensions, businesses not only secure their employees’ futures but also enhance their long-term sustainability and success.

Contact your pension provider to get expert help.

CPAS provides the administration support for the construction sector’s dedicated pension schemes and is registered to provide the core administration services to the Trustees of the Construction Workers Pension Scheme (CWPS) and Construction Executive Retirement Savings (CERS).

Contact Susan O’Mara, Business Development Manager (CPAS) via email susan@cpas.ie or phone 01 2234949.