In the coming years, as we continue to age as a nation, the subject of pensions is going to become more and more prevalent. We’re already beginning to see cracks emerging in the form of the Government’s pension deficit, the Irish Independent reporting only last month that ‘Ireland’s semi-state’s are staring into a €3.6BN pensions shortfall’.

But it’s not just those working in the public sector that is concerned for its future financial security. The Global Benefits Attitudes Survey showed that almost a quarter (23%) of respondents are delaying their retirement until at least age 70, while more than half (52%) are cutting spending, to save for their future.

But where does this fit in with employers? Is it up to us to look after the future financial needs of our staff or is it their responsibility to ensure they save enough to live the life they want when they retire? With these questions in mind, we caught up with Joanne Smith, Senior Financial Planning Consultant at MoneyCoach.ie, to discuss our legal obligations and what businesses can do to support their staff.

Q. So just what pension obligations to employers have to their employees?

Joanne: Even if a company only employs one member of staff, they still have certain pension obligations to their employee/s.  At a minimum employers must provide employees with access to a pension, this can be done by putting in place a company pension scheme, or facilitating access to a standard PRSA (personal retirement savings account).

Q. Does the employer have to contribute to employee’s pension scheme?

When setting up a company pension scheme, employers are obligated to make a ‘meaningful’ contribution to each member’s pension. A ‘meaningful contribution’ in widely deemed to be one of the following:

• Either the employer covering the costs of setting up the scheme and the ongoing operating costs of running the scheme, including covering the cost of death in service benefits 

OR

• Making a contribution into each members plan which is not less than 10% of the ordinary annual contributions, not including AVC’s, i.e. a minimum contribution of 10% of the value of the members ordinary contribution.
  

Q. What about a Standard PRSA?

Joanne: When giving employees access to Standard PRSA there is no obligation for the employer to contribute to the scheme, but they can if they want to. However, the following obligations on the employer do apply:

• The employer must appoint at least one standard PRSA provider
  
• They must notify employees that they have a right to contribute to a PRSA
  
• Allow the PRSA provider or Pension advisor reasonable access to employees at the place of work.
  
• Allow reasonable paid leave of absence to employees to set up a PRSA
  
• Make deductions from payroll when instructed by the employee and remit them to the PRSA provider.
  
• Advise employees in writing (normally on their payslip) at least once a month of their total contribution including the employer's contribution, if any. 
  

If an employer has a group pension scheme in place, but there are employees that are deemed ‘Excluded employees’ they will also need to fulfil the above PRSA requirements for their excluded employees.  Excluded employees are defined by the Pensions Board as any of the following:

• An employee who is included in the scheme for death-in-service benefits only.
  
• Employees who are not eligible to join the scheme or will not become eligible to join the scheme within six months from the date they began work for the company.
  
• Employees who are included in a scheme that does not permit the payment of additional voluntary contributions (AVCs) by members. 
  

Going Beyond Our Obligations

As Joanne so rightly points out above, employers have a duty – a legal obligation in fact - to provide their staff with access to pension schemes and to promote these to their employees. But what if we went beyond doing the bare minimum? What if we took this requirement and turned it into a perk for our employees, thus building a greater sense of loyalty and value between employee and employer. Believe it or not, but it can be done quite easily, at little or no cost to you as an employer.

The simplest way to do this is to communicate with your employees; to educate them on the importance of saving for the future and to help them realise just how much they will need to save to achieve the standard of living they desire once they retire. Some businesses do this through interactive games; others through online portals that help workers build their confidence around pensions by learning, step-by-step, how they work. If all of this sounds like too much work, then there’s a third option: Providing your employees with access to an independent financial advisor. Like MoneyCoach.ie, many insurance brokers are happy to work with you as an employer, providing free consultation services and workshops for your employees.

The economy is showing strong signs of recovery and with that employee migration is on the rise. As business owners our main concern is retaining the very best talent we have. For most of us profit margins are still tight and so we must look at different ways to add value to our employees experience if we don’t want them to move to the competition. Making financial planning and pension support a perk should be a no brainer for any business person keen to keep his or her staff and attract new talent.

The contents of this article are necessarily expressed in broad terms and limited to general information rather than detailed analyses or legal advice. Specialist professional advice should always be obtained to address legal and other issues arising in specific contexts.

We’ve all seen it before: A previously motivated and strong employee just seems to switch off and stop caring about the job they do. Instead of being first into the office, they stroll in just in time for a coffee break; their once hawk like eye for detail is replaced with careless, substandard work with all the bearings of Homer Simpson. While this may happen for an infinite number of reasons, the fact remains that it will impact of your other employees, client relationships and overall business. But just what can you do to address the issue??

If you ever find yourself in this position, as an employer you should be quite rightly concerned as to the fact that this employees standards of work and punctuality are slipping below the standard that you expect from an them.  Whilst no employer wants to get into a disciplinary situation there are times when you have no option but to confront the problem, ideally following a set Disciplinary Procedure, that will hopefully result in an improvement by the employee.

First things first, you should refer to the disciplinary procedure outlined in your employee handbook. Whilst there is no obligation on an employer to have a disciplinary procedure under the 1977 Unfair Dismissals Act an employee must be advised of the procedures that will be used for dismissal within 28 days of commencement of employment. 

It is worth remembering that the objective of a disciplinary procedure is to allow the employee to improve his or her performance and conduct and is not a form of punishment. You should avoid invoking a disciplinary process with the sole purpose of dismissing an employee.  Unfortunately a lot of employers wait until a situation has got so bad that they see dismissal as the only outcome but if a problem is dealt with early and correctly it can often be resolved.  Furthermore an employer should always exhaust all efforts to allow the situation to improve before resorting to a dismissal and all of the inherent risks associated with that decision.

As I mentioned, nipping the issue in the bud early on is key to avoiding, often unnecessary, more dramatic measures later on. By taking the appropriate action now you are increasing the likelihood of resolving the problem and avoiding unnecessary confrontation.  This is even more relevant where you don’t have a formal policy in place as if the situation escalates or where there is a lack of “procedural fairness” it is almost a certainty that a tribunal or court would find against you as an employer for unfair dismissal.

If this is the first problem you’ve ever had with a particular employee, the first step should be an informal discussion.  Basically, it would just be a meeting between you and the employee in question (or with her manager if there is a manager) where you could just point out that one or two situations that have arisen where the employees work and punctuality have not been up to the level you require and re-iterate what you expect of him or her in their role and how they should improve.  You might find out that there is something outside of the workplace that is causing the problems that might explain the change of behaviour.

This meeting should be held in private and you should make sure you have sufficient time to deal with the issues.  Reduce any chance of interruptions by either meeting out of the salon or at a time when it is not too busy.

You should point out that this is merely a preliminary step but if the situation continues to deteriorate you will have no option but to take a more formal approach next time.  Of course the employee should be given an opportunity to put forward his or her own views or an explanation.  Ultimately you should agree the steps required to improve the situation including a timeframe for the situation to be monitored that should be reasonable and allow for an improvement to take place.

Once you have agreed the steps required you should confirm your discussion in writing and ask the employee to agree so there is no ambiguity and agree to meet in say 2 weeks time to see if there have been improvements.  Hopefully, as in the majority of cases where early intervention is taken the problem usually resolves itself.

5 Steps to Remember:

1. Confront the situation as early as practicable-don’t wait until it gets so bad that you see no alternative but to fire the employee;

2. Keep in mind the disciplinary process is intended to improve the behaviour not act as a punishment;

3. Make sure the employee is given an opportunity to give an explanation-ask her if she feels she is happy with her performance;

4. Try and agree the steps required and a suitable time frame for the employee’s behaviour to improve;

5. Make sure you follow up on the agreed steps and meet to review the situation again within the agreed time frame.

The contents of this article are necessarily expressed in broad terms and limited to general information rather than detailed analyses or legal advice. Specialist professional advice should always be obtained to address legal and other issues arising in specific contexts.