For Irish company directors, early retirement planning is usually driven by three practical issues: when you can access your pension, whether you can retain your shareholding, and whether you can continue working in some form after retirement.
The rules differ significantly depending on whether you have an Executive Pension (Master Trust) or a company PRSA.
Executive Pension / Master Trusts (EPPs)
Under an Executive Pension or Master Trust, company directors can generally access pension benefits from age 50 onwards, provided they have genuinely retired from the employment linked to the pension.
However, early retirement before “age 60” is more restrictive in practice.
To take benefits early under an EPP or Master Trust, the director must:
- Cease the employment to which the pension relates
- Demonstrate a genuine retirement from that role under Revenue rules
- In many proprietary director cases, reduce or relinquish control or significant shareholding may also be required, depending on ongoing involvement
Revenue places strong emphasis on whether the director has fully stepped away from the role in substance, not just on paper.
After retirement from that employment, the director is free to:
- Work elsewhere
- Start a new business
- Take on unrelated employment
Company PRSAs
A company PRSA operates with greater flexibility in relation to ownership.
Under a PRSA, early retirement is still strictly based on bona fide retirement.
This means:
- Pension benefits can generally be accessed from age 50 onwards
- The director may retain their shareholding after retirement and take dividends
- However, bona fide retirement is essential, meaning the director must fully cease all employment in substance and in fact, not simply reduce duties or change title
Revenue will expect clear evidence that the individual has genuinely retired from employment before pension benefits are accessed.
This makes PRSAs particularly suitable where the director wishes to step back from work but continue as a shareholder or owner of the business.
Retirement from Age 60 and Normal Retirement Age
From age 60 (or the scheme’s Normal Retirement Age, if higher), pension access becomes significantly less restrictive under both structures.
At this point:
- There is generally no requirement to fully exit the business in the same way
- Continuing to work or retaining shareholding is usually not an issue
- Pension benefits can be accessed from age 60 as long as you have that age set on the pension record (the plans normal retirement age – NRA).
Key Planning Point
The critical difference between plan types is how retirement is defined in practice.
For Executive Pension and Master Trust arrangements, early access is closely tied to full cessation of the employment and, in many cases, withdrawal from control of the business.
For PRSAs, retirement is defined more narrowly around stopping employment, but must still be a bona fide retirement in substance, with Revenue requiring clear evidence that employment has fully ceased.
Conclusion
For Irish company directors considering early retirement before age 60, with a plan to taking their pension plan benefits, the choice of pension structure has a direct impact on:
- Whether early retirement is feasible
- Whether shareholding can be retained
- How strictly “retirement” is interpreted under Revenue rules
In many cases, the decision should be made well in advance of retirement to avoid unintended restrictions.
Next Step
If you are a company director considering early retirement, it is important to plan this carefully in advance to avoid unintended restrictions.
Ken O’Gorman – One Quote Financial Brokers
📞 01 845 0049
📧 ken@onequote.ie
Or enquire online for a retirement planning review.
Contact Us
To arrange your free no-obligation discovery consultation by phone contact us today.
Contact: Ken O’Gorman – Director – CB, QFA, RPA, SIA – Retirement Planning Specialist – One Quote Financial Brokers on: 01 845 0049 or email: ken@onequote.ie
Or enquire online and give us a quick outline of how we can help.
