Pensions

Pension Options for Employees

The information below is tailored for company employees seeking a pension. We have provided similar information guides if you are a company director or self employed.

If you are employed, you are entitled by law to have access to some form of pension plan through your job. Many companies provide their staff with an employer or occupational pension plan. If you company does not have one, by law your employer must offer you a standard PRSA.

Occupational Pension Plans

An employer or occupational pension plan is one that is set up by an employer to provide pension and other benefits for employees. More

PRSA’s

PRSA stands for ‘Personal Retirement Savings Account’. Esentially, a PRSA is a simple and more flexible pension.

What else is there to know?

Starting a pension is important, but planning for your retirement is a long term commitment. Keeping abreast of what is happening with your plan, and ensuring your pension continues to meet your needs in retirement is essential.

Additional Voluntary Contributions

If you are in a pension scheme at work and wish to boost your benefits under that scheme, you may want to consider making an AVC.

Pension Options for the Self Employed

If you are self employed, you need to start thinking about you’re pension options. Legislation around pensions can be complex and the rules about how much you can pay and how much tax you might save can be baffling.

PRSA’s

PRSA stands for ‘Personal Retirement Savings Account’. Esentially, a PRSA is a simple and more flexible pension.

Pension Options for Company Directors

Company or Excutive Pension plans provide company directors with a very attractive and tax efficient method of converting company wealth into personal wealth. The director can choose to contribute himself (and receive marginal rate income tax relief on those contributions) or to fund the pension entirely from company resources (or a combination of both). These company funded contributions are not treated as a benefit-in-kind for the director and the company can offset them against Corporation Tax.

Tax relief

No other savings vehicle is as tax efficient as a pension. Tax relief is available on your own contributions and if you are a Director or Employee tax relief is available on any contributions your company makes on your behalf.

Personal tax relief is based on the following limits as set out by Revenue and is subject to a salary cap of €115,000. The percentage of your income you can get tax relief on increases as you get older.

Your age % of your income
Under 30 15%
30 to 39 20%
40 to 49 25%
50 to 54 30%
55 to 59 35%
60 or over 40%

© 2013 Kathleen Power t/a KP Financial Services.

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