Company or Executive 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 the contributions against Corporation Tax.
PRSA stands for ‘Personal Retirement Savings Account’. Essentially, a PRSA is a simple and more flexible pension. PRSAs make it easier to save for retirement because they offer value for money, flexibility and convenience. A PRSA pension helps you save for retirement, and if your employment status changes or you move to a new employer, you may be able to bring your PRSA with you.
Income Tax Relief on Pensions
The maximum pension contributions, in any one year, for which you are entitled to tax relief, is related to your age and is expressed as a percentage of your gross income.
The maximum gross income figure for relief purposes is €115,000.
Tax Relief by Age Bracket
30 to 39:
40 to 49:
50 to 54:
55 to 59:
60 and over:
Warning: The value of your investment may go down as well as up.
Warning: If you invest in this product you may lose some or all of the money you invested.
Warning: If you invest in this product you will not have access to your money until you chose to retire.
Warning: Income tax relief is not guaranteed. To be eligible to claim income tax relief, your income must be taxable under the appropriate Schedule. To claim income tax relief, you can apply to your Inspector of Taxes to adjust your tax credits. Contributions deducted from salary will receive immediate tax relief. Any regular contributions from your employer are deductible by them as a business expense for Corporation Tax purposes in the Company tax year in which contributions are made. Pension income in retirement is subject to income tax at your highest rate on withdrawal, Universal Social Charge (USC), PRSI (if applicable) and any other charges or levies (tax) applicable at the time.