Corporate Pensions
Corporate Pensions
A Non-Standard PRSA, often proves the best choice for many Irish limited company owners. It be particularly advantageous, for proprietary directors, who don't have have long related company service, that might otherwise enhance their pension lump sum.
Since the Finance Bill 2022 which resulted in the removal of benefit-in-kind (BIK) restrictions, a salaried company director, can now contribute via company funds into an individually owned PRSA.
From January 2025, annual contribution limits will be restricted one times salary, with the only other limitation being that the total PRSA fund accumulated (form all Irish pension sources) remains under what's called the Standard Fund Threshold, (currently 2M).
Corporate Pensions
As an impartial pensions broker, we compare the market for the best, low-cost PRSA solutions and provide the broadest range of investment fund
options.
Our expert ongoing advice includes impact and investment risk management, based on your own personal preferences.
We offer multi-asset diversification, with a choice of both passive and active funds, as well as the ability to different fund manager strategies.
For clients with an appetite of higher risk, we also offer specialist funds with built in downside protection.
Corporate Pensions
A company may make whatever contributions are necessary to build up a pension fund subject to a maximum fund value of €2m.
Come retirement age (from age 50), when you’re ready to take your benefits, your options are to take a tax-free lump sum and buy an annuity, or to reinvest the balance in an approved retirement fund, and make income withdrawals from that, or you can leave the balance in your PRSA and take an income (vested).
People who choose not to access their PRSA benefits come age 75, will see it automatically vest.
You can draw a tax-free lump sum of up to 25% of your PRSA pension pot. A limit of €500,000 applies to the tax-free lump, with the first €200,000 is tax-free and the balance up to €500,000 is taxed at 20%.
An annuity pays a retirement income for the rest of your life in exchange for the balance of your pension pot at retirement.
An ARF allows you to retain your pension pot at retirement, subject to minimum withdrawals, and can be passed on to your family on death.
Questions & Answers
Your company funded PRSA questions answered.
An Executive PRSA should always be weighed up against an Executive Pension Plan, on a case by case basis, but it does carry the advantage of a full tax-free payout to your spouse on death, before retirement and often carries lower charges than an EPP, with equivalent fund choice, provided it is a non-standard PRSA contract.
We work with all leading PRSA providers in the Irish market, e.g. Zurich, New Ireland, Aviva, Irish Life, Standard Life etc, and enjoy access to over 23 separate fund managers.
An AMC, which typically amounts to 1.25% PA, with 100% allocation on all regular and lump sum contributions. This covers both set-up costs and our long-term investment advice and administration support.
Working with us means that you pay:
No a PRSA is held in your own name, so does not require a Trustee appointment.
An Executive PRSA provides full tax relief on contributions, as well as tax-free growth, and a tax-free lump sum come retirement.
This means:
1. Company-funded Executive PRSAs effectively receive 52% PAYE relief, plus corporation tax relief against profits@12.5%
2.There is no DIRT or capital gains tax on investment growth.
3. Up to 25% of your eventual PSRA retirement pot can be taken as cash, with the first €200,000 completely tax free.
Employers can pay regular and single lump sum contributions to their executive PRSA.
An Executive PRSA can also accept transfers from other Executive pensions as well as previous group schemes – these would usually be paid as electronic fund transfers from other institutions.
Employers can pay a single contribution at any time, which can be done instead of, or as well as, paying regular monthly or annual contributions.
Senior employees and non-executive directors can make regular contributions on the same basis as their employer with the combined contributions payable through company payroll. They can also make one-off lump sum payments within Revenue Limits via EFT.
Yes, all private pension holders are still entitled to the State pension in addition.
If you die prior to retirement, your full Executive PRSA value is payable as lump sum to estate. There is no requirement to transfer any part of the funds to an ARF and there is no inheritance tax liability between spouses.
Under an Executive PRSA, you can now draw your pension plan benefits from age 50 provided that you are bona vide retired, however, if you have to stop working due to serious ill-health, you can take your pension benefits earlier.
You can contribute and then draw down your retirement benefits from your PRSA up a maximum age limit of 75.
Where a PRSA holder has not commenced taking retirement benefits and has reached their 75th birthday, they can then access their 25% tax-free lump sum and must vest their PRSA.
A vested PRSA is treated for tax purposes as the equivalent of an ARF.
This means that an imputed distribution of 4% pa, will apply to the PRSA from age 61, increasing to 5% from age 71.
On death, the vested PRSA will be treated in an identical manner to an ARF as it will form part of a deceased’s estate.
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OneQuote Financial Brokers,
11 James’s Terrace, Malahide,
Co. Dublin, K36 CV08
One Quote Financial Brokers is regulated by the Central Bank of Ireland no: 459006.
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