What Is Pension Contribution? | HR Glossary | BambooHR
Money paid into an employee's retirement savings by the employee, employer or both.
A pension contribution is money paid into a retirement savings arrangement to build a fund for an employee's later life. Contributions may come from the employee, the employer, or both, and are usually expressed as a percentage of pay.
Employer contributions are a valuable, often underappreciated, part of the total rewards package, while employee contributions frequently attract tax relief, making pension saving efficient. In defined-contribution schemes, the eventual pension depends on contributions and investment growth.
With Ireland introducing auto-enrolment, contribution obligations are changing significantly for employers who previously offered no scheme, phasing in employee, employer and State contributions. Payroll must deduct and remit contributions accurately and keep clear records for each member.
