Business Pension
Self Administered Pension Scheme
A Small Self-Administered Scheme is also known as Self-Administered Pension Scheme (SAPS) or Self-Directed Trust. It is useful for both directors and employees. It has greater flexibility and gives you more control over the investments and costs of your pension wealth planning. It is approved by the Revenue Commissioners and is an excellent vehicle for maximising the tax efficiency of your pension planning.
What are the benefits of setting up a small self administered pension scheme?
There are a number of benefits associated with SAPS.
Tax efficient.
Employer contributions (within Revenue limits) are allowable as a deduction against Corporation Tax. They are also not treated as a benefit in kind for the scheme member. This is in contrast to a wage increase in a similar amount, which would attract an income tax liability for the employee.
The employee's contributions to the scheme also attracts income tax relief.
The growth of a SAPS is tax free. Currently a SAPS is exempt from, Income Tax, DIRT, Capital Gains Tax in Ireland.
Control
You can control the choice of assets your SAPS invests in, subject to revenue requirements.
You also have control over the level of risk you are willing to take. This gives you great flexibility when it comes to taking advantage of any investment opportunity which may arise.
The above areas of control mean that you can also know the level of costs associated with the SAPS. These costs are also tax deductible for the company.
You can control the amount of contributions into your scheme.
It is a great way to move assets into a pension vehicle.
It is a great estate planning tool.
What happens if I die before retirement?
The value of your SAPS at the time of your death is used to provide benefits for your next of kin. A lump sum of up to four times your salary can be paid to your estate tax free. If there are funds remaining after this payout, then an annual income for dependants can be purchased with the surplus.
What is the difference between a SAPS and an ordinary pension?
The main difference is that instead of giving your contributions to an insurance company to invest on your behalf, you invest the money yourself, with the help of a pensioneer trustee, who must be Revenue Approved. We can help with all the details of setting up the scheme so that it meets these requirements. We work with a number of such trustees, who would be available for your self administered pension scheme. The revenue have placed some restrictions on how you can invest the pension funds.
Where can I get independent qualified advice on SAPS in Ireland?
Our qualified experienced experts can help you to decide if a Self-Administered Pension Scheme is suitable for you. We will advise on how to set it up and how best to maximise the growth potential of the scheme. We offer a complete Pension Service to employers in Ireland. Contact us today for a Free, no obligation, consultation. Telephone 1890 666 666 or use the blue call me back button.
Additional Voluntary Contributions
Additional Voluntary Contributions (AVCs)
Additional voluntary contributions (AVCs) are a tax efficient way for members of a group pension scheme to save for their retirement. They are extra contributions made by the group scheme member in order to provide better benefits when they retire. They are an excellent way to make full use of tax relief. They are very useful when it comes to topping up your pension if you find that there is a pension gap.
How flexible are AVCs?
AVCs are very user friendly. You can decide to contribute more, or less, or cease altogether as your circumstances alter.
Until 27th March 2016 you can withdraw up to 30% of the value of Additional Voluntary Contributions (AVCs) made to your occupational pension scheme and PRSAs. You should talk to one of our experts before doing so, in order to maximise the benefit to you.
Where can I find out more?
Please contact one of our experienced and qualified advisers to find out how AVCs can help you prepare for the future
Pension Schemes
Occupational pension schemes
The law does not force employers in Ireland to provide occupational pension schemes for their employees. Many employers are choosing to do so.
All about that occupational pension scheme
An occupational pension scheme is organised by the employer to provide pensions to one or more employees on retirement.
On the death of the employee
the benefit of the pension passes to surviving dependants.
The pension scheme may be any of the following:
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Funded or unfunded
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contributory or non-contributory
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defined benefit or defined contribution
What is a Self-Administered Pension Scheme?
A self administered pension scheme puts you in control. These schemes have become the investment vehicle of choice among employers. They can only be set up by an employer. They can be established for salaried directors and/ or salaried employees. For more click here>>
The difference between an occupational pension and a personal pension
As we say earlier, an occupational pension scheme is organised by the employer, and is regulated by the Pensions authority.
A personal pension scheme ( or a Retirement Annuity Contract – RAC) is arranged by the employee or self employed person in order to provide a pension on retirement or on death, payment to surviving dependants. They are governed by tax regulation and financial services legislation. The Pensions Authority does not have any regulatory input.
You can avail of both methods of providing for your retirement, however tax relief will only be available for one scheme.
Personal Retirement Savings Accounts more>> are being used by many employers who do not wish to organise an occupational pension scheme.
An employer must offer access to at least one standard PRSA to each employee who does not have access to an occupational scheme, within six months of commencing employment. A PRSA must similarly be offered for AVC purposes if the scheme does not have the ability to offer AVCs, more>>.
What happens when I change employment?
If you change employer or become self employed or otherwise leave the occupational pension scheme you may be able to avail of one of two options.
If you have 2 years service or more, you are entitled to have your benefits preserved. That way, when you reach the retirement age of the scheme, you can avail of the benefits which had been preserved.
Your other option is to have the benefits transferred to another pension scheme. This can often prove to be the better choice, as you will tend to monitor the new scheme more closely.
Where can I get independent advice on transferring my pension benefits?
You can avail of a free time limited consultation with one of our qualified experts. They will help you decide on a copurse of action that will maximise the return on your pension funds.
Just use the quote button above and we will contact you at a time that suits.
Occupational Pension Plan.
This is a plan set by an employer to provide pension and other benefits for an employee.
The employer must make a contribution to this type of plan.
It is an excellent way for employers to reward loyal and hard working staff.
It is a tax efficient way to transfer funds to the employee, ultimately by way of pension.
It can be tailored to provide cost effective life assurance and disability benefits to the employee.
What's the difference between defined benefits and defined contribution schemes ?
A defined benefits scheme has a method for calculating the pension to which you will be entitled on retirement.
It usually refers to your earnings and length of service.
By applying the formula set out under the scheme you can calculate the benefits which will accrue to you under the scheme.
Many schemes have not provided sufficient funds for anticipated pension requirements and will have to make serious adjustments or risk the fund becoming insolvent.
With such fluctuations in the economy, they are not a popular product.
A defined contribution scheme focuses on the contributions to be made to the scheme.
These are easier to predict and control.
They are a more popular scheme.
Employer and employee agree at the start, on the amount of contribution each should make.
The ultimate pension payable is dependent on the value of the fund at retirement.
What happens to my occupational pension if I change jobs?
You can do one of the following:
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Leave the money in the pension plan and have it treated as paid up.
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Get a refund of your own contribution to the plan. You loose out on your employer's contribution and they are taxable. This is available if you have less than two years pensionable service.
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Transfer the value of the pension into another pension scheme. This could be your new employers occupational pension scheme, a PRSA or a retirement bond
These options are affected by length of pensionable service.
What should I do now?
We recommend that you obtain independent advice prior to taking any action that would affect your pension.
We can prepare for you a customised plan suited to your individual circumstances.
In pension planning no two circumstances are identical.
That is why you should contact us today.
Use the quotation button
Or telephone us on 1890 666 666.
Executive Pension
Executive pension plans are taken out by employers to provide for the retirement of executive and key employees. They are set up under trust. The Employer normally acts as Trustee.
Tax Benefits
Executive Pension plans provide excellent tax benefits to both the employer and employees.
For Employers- Tax relief for the company
An employer must make a ‘’meaningful contribution’’ to the arrangement. Contributions made by the company into an Executive Pension plan can usually be offset against Corporation tax as an allowable business expense (subject to Revenue limits). The company can choose to make regular contributions or lump sum payments to tie in with your company’s profitability.
For Employees- Tax relief for you
You can also benefit from tax relief on any personal contributions you make. Tax relief is normally available at your marginal rate of tax. This reduces the net cost of your pension contributions.
Retirement Benefits
On retirement you may have the following options:
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Retirement lump sum
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Annuity
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Approved Retirement Fund (ARF)/ Approved Minimum Retirement Fund (AMRF)
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Taxable cash
We have a great range of Providers to choose from who have a huge investment choice when setting up an Executive pension.
Start your quote today using the quote button above.
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