Ireland Pension vs PRSA 2025 — Occupational vs Individual
Two different legal structures
An occupational pension scheme is a trust set up by an employer for its employees; the employer must be a party to it, and typically contributes to it. A Personal Retirement Savings Account (PRSA) is a personal contract between an individual and a PRSA provider — you can open one whether or not you have an employer, and an employer's involvement is optional rather than structural.
That single difference — trust vs. individual contract — drives most of the practical distinctions between them.
Who has to contribute
An occupational scheme generally requires some employer contribution to exist at all, even if modest. A PRSA needs no employer contribution whatsoever — an employer may contribute, but is not obliged to, and a self-employed person or someone between jobs can fund a PRSA entirely from their own contributions.
Tax relief on your own contributions — identical limits
Whichever you use, your own contributions attract income tax relief (not PRSI or USC relief) up to an age-related percentage of net relevant earnings, applied to earnings capped at €115,000 regardless of what you actually earn:
| Age | Maximum relievable % of earnings |
|---|---|
| Under 30 | 15% |
| 30–39 | 20% |
| 40–49 | 25% |
| 50–54 | 30% |
| 55–59 | 35% |
| 60 and over | 40% |
A 45-year-old earning €150,000 gets tax relief on contributions up to 25% of €115,000 (the cap, not their actual salary) = €28,750 for the year, not 25% of the full €150,000.
Employer contributions — where BIK treatment diverges
Employer contributions to an occupational scheme are never a Benefit in Kind to the employee, and no PAYE, PRSI or USC applies to them, at any level.
Employer contributions to a PRSA are also free of BIK, PRSI and USC — provided they do not exceed 100% of the employee's salary in the tax year, a limit that has applied since 1 January 2025. An employer contribution above that limit is treated as a BIK on the excess. In practice the 100% ceiling rarely binds for an ordinary salary-linked contribution, but it matters for a director or highly paid employee receiving a large one-off employer contribution.
Portability and control
A PRSA moves with you: change employer, and the PRSA (and any employer contributions already made to it) stays under your own contract, unaffected by the job change. An occupational scheme is tied to the employer and its trustees; leaving the job means transferring your benefit out, opting for a preserved benefit within the old scheme, or in some cases taking a refund of your own contributions — the options and the process differ by scheme, and are a matter for the scheme rules rather than something you control unilaterally the way you can with a PRSA.
Where "My Future Fund" fits
My Future Fund, the State's auto-enrolment retirement savings scheme, began collecting contributions on 1 January 2026. It is neither an occupational scheme nor a PRSA — it is a separate, State-run arrangement into which an employee is automatically enrolled if they are aged 23–60, earn over €20,000 a year, and are not already in a qualifying occupational scheme or PRSA. Contributions start at 1.5% each from employee and employer, with a 0.5% State top-up, rising in stages over ten years to 6%/6%/2%. Unlike an occupational scheme or PRSA, employee contributions to My Future Fund do not attract income tax relief in the usual sense — the State top-up serves the equivalent purpose instead. Anyone already contributing to a qualifying occupational scheme or PRSA that meets the minimum contribution levels is exempt from auto-enrolment, so the choice between an occupational scheme and a PRSA still matters even after auto-enrolment's introduction.
FAQ
Q: Can I have both an occupational pension and a PRSA at the same time? A: Yes, though your combined tax-relievable contributions across all arrangements are still subject to the same single age-related percentage of the €115,000-capped earnings figure — having two arrangements does not double the relief available.
Q: If I'm self-employed, can I use an occupational scheme? A: No — an occupational scheme requires an employer to be a party to the trust. A self-employed person uses a PRSA (or a Retirement Annuity Contract) instead.
Q: Does the employer contribution to a PRSA use up my own age-related tax relief limit? A: No. The age-related percentage limit applies to relief on the individual's own contributions; employer contributions to a PRSA sit outside that limit and are not counted against it (though they count towards the separate Standard Fund Threshold on total pension benefits).
Sources
Figures verified against Revenue and gov.ie guidance as of 30 July 2026:
- Revenue Tax and Duty Manual, Pensions Manual Chapter 24 (age-related contribution percentage table, €115,000 earnings cap)
- Revenue — "Pension contributions" (Benefit in Kind for employers) (occupational scheme employer contributions never a BIK; PRSA employer contributions BIK-free up to 100% of salary, effective 1 January 2025; no PAYE/PRSI, and USC-exempt since 2016)
- gov.ie / Department of Social Protection — "My Future Fund" (1 January 2026 launch, 1.5%/1.5%/0.5% starting contribution split, phased rise to 6%/6%/2% over ten years, €20,000 earnings floor and 23–60 age band for automatic enrolment, exemption for existing qualifying schemes)