Contractors’ Pensions are Private Company Pension Plans suited to professionals who operate via their own limited companies and are not employees of a larger firm or business. Rather than deducting your pension contributions from your salary to get tax relief but not PRSI and USC relief, the smart thing to do is pay employer-only contributions.
In Ireland, contractors work on a daily rate fixed term contract basis and have established their own limited company. e.g. IT Contractors, Project Managers, etc. This enables such people to take advantage of the added benefits of a company-funded pension plan.
Contractors Pensions – Advantages in Ireland
All directors including Contractors can avail huge tax savings by affecting a Private Company Pension. You can choose between an Executive Pension Plan, or PRSA depending on your needs benefiting from the following.
1. Because contractors own and control their own companies they can use company money to fund their pension for their own personal benefit whilst the company claims full corporation tax relief.
2. Unlike personal pension contributions that are limited by age, a company is not limited to a specific percentage of salary in terms of contractors’ pension contribution levels.
2. Contractors are not limited to 25% of your final retirement fund as a lump sum but can take up to 1.5 times your final salary if higher (service permitting).
3. Your company’s contributions to the plan are not subject to a benefit-in-kind charge in your hands for income tax purposes. This means you will not have to pay income tax, PRSI, or the Universal Social Charge (USC) on your company’s contributions to your plan.
4. Your plan enjoys tax-free investment growth, which means that any growth achieved on your investment is yours to enjoy in retirement.
5. At retirement, you can take part of your accumulated fund as a lump sum, which may be partially or fully tax-free, depending on the value of your fund at that time.
Contractors Pensions – Best Value through One Quote Financial Brokers
1. We don’t charge a consultation fee.
2. You get 100% investment allocation.
3. Annual Fund Manager charges (AMC) from 1.00% PA.
1. You can choose from a wide range of fund managers and funds.
2. You can invest in a full range of asset classes, industries, and geographies.
3. You can choose active or passive, multi-asset or exchange-traded funds.
First Class Service:
1. Free personal risk profiling and investment advice.
2. 24/7 online pension plan access.
3. Free Trustee Services & Annual Benefit Statements.
Contractors Pensions – Make An Enquiry
We hope you find this information useful, but should you need to speak with a pensions specialist simply call: 01 845 0049 or make an enquiry.
Ken O’Gorman – QFA, SIA
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