Additional Superannuation Contributions (ASC) are mandatory pension payments made by public sector employees in Ireland to fund their retirement benefits.
These contributions are calculated based on an employee's earnings and pensionable pay. Ensure accurate deductions and record keeping during payroll processing.
On January 1, 2019, the Irish government introduced ASC to replace the temporary Pension Related Deduction (PRD), or 'pension levy.' This change established ASC as a permanent pension contribution system for public sector employees.
The Year End delivery for the 2018 tax year incorporated all updates needed to support the new ASC requirements. These changes affected both CorePay and CorePension systems, ensuring seamless integration of the new contribution structure.
The ASC system now offers a stable framework for pension contributions, replacing the previous levy system with a solution designed to meet future pension obligations.
Will ASC be treated in the same manner as any other pension contribution?
ASC in not an RAC (Retirement Annuity Contract). ASC like PRD will be treated as an expense for the purpose of PRSI and Income Tax.
There will be Employer PRSI relief in respect of ASC.
ASC will not qualify for USC relief
ASC will not qualify for employee PRSI relief.
ASC will qualify for tax relief only
ASC will not be included for the purpose of calculating Age-related tax relief thresholds.
ASC contributions will have no impact on the calculation of referable amounts under the Single Scheme
Requirement to produce the ASC on the individual's Single Scheme record or for other schemes.
ASC is separate to contributions payable under pension scheme rules and consequently should not be recorded as a pension contribution.
What is the requirement surrounding showing ASC on the payslip?
ASC should be shown separately to other deductions on the payslip.
What is the difference between 'covered' and 'non-covered' public servants?
The legislation provides for non-covered public servants. There are currently no non-covered public servants. Should circumstances arise where there are non-covered public servants separate instruction will issue to the relevant body.
What is a standard accrual pension v the single scheme?
Is the former someone who joined pre 2013 and the latter who joined since 2013?
For the purpose of ASC there are 3 types of pension schemes as follows:
Single Pension Scheme is as defined in Section 9 of the Public Service Superannuation (Single Scheme and Other Provisions) Act 2012. In general the Single scheme applies to persons appointed on or after 1 January 2013 who have never worked in the Public Service or who, having previously worked in a 'non-Single Scheme' pensionable position, have had 26 week break in service since their previous PS employment.
A Standard Accrual Pension scheme is as defined in Section 28 of the Public Service Pay and Pensions Act 2017. In general standard accrual pension schemes apply to persons appointed before 1 January 2013 and who accrue pensionable service on a model scheme basis i.e. 1 years pensionable service per year of full-time service.
A Fast Accrual Pension scheme is as defined in Section 28 of the Public Service Pay and Pensions Act 2017. In general fast accrual pension schemes apply to persons who accrue pensionable service at a faster rate than 1 years pensionable service per year of full-time service and who can acquire maximum pension benefits (40 years) in a shorter period of time. Examples of such schemes are the Garda Superannuation Scheme and pension schemes for Judges and Ministers.
In fast-accrual pension schemes, there is a requirement to pay 40 years contributions over a 30 year period (e.g. doubling up contributions for service years 20-30) does this apply to ASC?
Doubling up of pension contributions as required for various fast accrual grades does not apply to ASC.
The legislation provides separate bands and rates for members of pre-2013 pension schemes (Non-Single Scheme pension schemes) with Fast Accrual Terms to take account of the fast accrual nature of those schemes.
Currently any taxable earnings are PRDable - given that the pension is calculated on the actual rate of pay (whether Social Welfare is payable or not), how does maternity leave/illness benefit payable by social welfare play into ASC?
Similar to PRD, ASC should be calculated on the Gross Pay of an individual including any illness benefit/maternity benefit.
Should BIK be included in the ASC calculation?
Only pensionable remuneration is included in the calculations for the purpose of assessing ASC liability. In general Benefit-in-Kind (BIK) is not pensionable and on that basis BIK will not be subject to ASC.
📌Note: This differs from PRD where BIK was subject to PRD.
Should employers retain PRD funds to cover any refunds that could become payable if a staff member leaves within the two year window ending 31 Dec 18? If not how does the employer seek reimbursement of PRD for such instances?
Employers should not retain PRD funds at the end of December 2018 for the purpose of making future PRD refunds after PRD ceases to operate.
It is envisaged that PRD refunds post 2018 will be offset against ASC deductions in the year in which the PRD refund is made. However, payrolls should distinguish between PRD refunds and ASC refunds.
Will ASC follow the same rules as PRD?
ASC will operate similar to PRD, in general ASC will be cumulative. Ordinarily, the only circumstances where ASC will operate on a Week 1 basis is where an employee is between employments and has yet to supply an ASC45 or where there is a significant underpayment of ASC/PRD in a previous employment a repayment arrangement has been approved by DPER.
A key difference relates to the amount/type of remuneration which is liable. In general, an employee?s PRD is calculated on his or her gross pay. However, ASC will be calculated on pensionable gross pay only.
How will ASC operate if moving between schemes e.g. week 1 basis?
Similar to PRD, ASC will operate on a week 1 basis pending the individual providing an ASC45 (equivalent to the PRD45).