If you are a company director or senior executive your company may give you the option of setting up an executive pension on your behalf.
What is an Executive Pension?
This is a tailored company pension plan for senior executives and company directors which is set up on an individual basis. The company has the option to make larger contributions, which is suitable for those on a higher income scale.
Benefits of an Executive Pension
Tax relief
- On your executive pension contributions.*
- Investment growth is also tax-free.
Flexibility
- You and your employer decide how much to contribute to your Executive Pension.
- You can stop and restart your contributions at no extra cost.
* The tax relief will be subject to Revenue limits and depend on your age, length of service and years to retirement. The maximum limits must be calculated on an individual basis, Brennan Pension & Investments will calculate this on your behalf.
At retirement
Executive pensions provide a choice of benefits at retirement. The size of the fund at retirement will depend on a number of factors such as:
- Contributions
- Length of service
- Salary
- Fund growth
You are entitled to 1.5 times your final salary (averaged over 3 years) in a tax free lump sum. The balance of your fund must be used to purchase an annuity.
If you are a Proprietary Director (those who own more than 5% of the company) you have the option to take the benefits as outlined for an ARF
Certain Senior Executives/ Company Directors may wish to consider a Self Invested Pension Plan (SIPP) or Self Administered Pension Plan (SAPP) which allows for greater investment freedom. Under both options you can choose to invest your pension fund in specified assets such as individual company shares, bonds, property etc.
It is essential that all of the above pension options are properly funded in order to provide meaningful benefits at retirement. One of our independent financial advisers will work with you to design a funding plan to meet this need. Talk to us today to ensure you maximise the potential of your pension so that you enjoy your retirement to the full. Call us today on 01 639 5536 or Email info@brennanpi.ie
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