A pension is a tax efficient way of providing an income in retirement.
Pensions come in a variety of formats:
- The Self-employed and persons in non-pensionable employment can arrange their pension via a Personal Pension or a Personal Retirement Savings Account [PRSA].
- Company Directors can arrange their pension via an Executive or Company paid Pension Plan.
- Employees can be pensioned by joining their employers' occupational scheme at work.
Our highly experienced team of advisors will work on your behalf to deliver a Pension solution to safeguard the lifestyle of you and your dependents for the future.
Your pension is one of the most important ways of planning for your financial future.
With Corless & Associates you get to make the most of the opportunities to grow your money and take advantage of generous tax relief. We will advise you on optimising your retirement options, including how to retire and access your tax-free cash.
With our pensions you have the flexibility to:
- Make regular contributions
- Choose the level of your contribution
- Increase or reduce it at any time.
- Add one-off contributions to your plan at any time
- Take a break in payments if you need to.
Warning: The value of your investment may go down as well as up.
A company pension is a pension plan for all employees which is set up by the employer and where the employer makes payments into it on your behalf. It can be set up as a one man arrangement or for a number of employees.
With a Corless and Associates pension plan you are guaranteed the following:
- Choice - With our executive pension plans, we offer a range of options depending on how you (the member) want to save for your retirement.
- Charges - With our executive pension plans, we offer some of the most competitive rates on the market.
- Flexibility - your level of contribution can be agreed and you have the option to increase or reduce it at any time. With Corless and Associates you also have the option to contribute lump sums each year and if needed, we can arrange a payment holiday for you.
- Tax relief - You will get income tax relief and your employer will get corporation tax relief on payments made into an Executive Plan.
Executive Pension Plan
If you are a Senior Executive or Director of your firm, you may have the option to set up a personal pension scheme into which contributions can be paid and/or transfers from existing pension arrangements can be made. An Executive Pension Plan (EPP) is a tax efficient occupational pension which is set up under trust for the benefit of a single member. An EPP allows you to control your contributions and investments.
Once you retire there are four options available to you depending on the type of pension scheme you have. The options are:
1. A retirement lump sum
2. An annuity
3. Reinvesting your pension
4. Taxable cash
Retirement lump sum - You can take part of your pension fund as a retirement lump sum. You may be able to take some or all of this retirement lump sum tax free. Everyone has the option to take 25% of the fund as a retirement lump sum. The balance of the fund can then be used for one or more of the following:
- Buy a pension for life
Invest in an Approved Retirement Fund ( ARF ) or Approved Minimum Retirement Fund (AMRF)
- Take as a taxable cash sum
If you have a company pension you also have the option to take a retirement lump sum of up to one-and-a-half times your final salary, depending on the length of time you have actually been employed. The balance of your pension must be used to buy a pension for life.
However your AVC fund can be used for one or more of the following:
- Buy a pension for life
Invest in an Approved Retirement Fund (ARF) or Approved Minimum Retirement Fund (AMRF)
- Take as a taxable cash sum
You may be able to take some or all of your retirement lump sum without paying any tax. The maximum tax free amount you can receive is €200,000. Retirement lump sums between €200,000 and €575,000 will be subject to standard rate income tax (20% as at March 2011).
Any retirement lump sums greater than €575,000 will be taxed at your marginal rate as income, the Universal Social Charge, PRSI (if applicable) and any other charges or levies ('tax') will also be taken.
Both the €200,000 and €575,000 limits include all retirement lump sums you have received since 7th December 2005.
Annuity - An annuity is what many people commonly refer to as a pension. The most common option at retirement is to use your accumulated pension fund to buy an annuity from an insurance company. This is a guaranteed income for the rest of your life. The amount of income you receive will be based on, among other things, your life expectancy at retirement - so will vary by retirement age and gender - and the size of your retirement fund!
Payments from your annuity are treated as income so you will have to pay income tax on it and any other taxes due at that time.
Reinvesting your pension - ARF's
With certain types of pension plan you may be able to reinvest some or all of your pension fund in an approved retirement fund (ARF) and withdraw money as
you want, depending on certain restrictions. All withdrawals are treated as income so you will have to pay income tax on them and any other taxes due at
Taxable cash sum - Depending on the type of plan you have, you may be able to take the rest of your fund, after the retirement lump sum, in one go. You will need to pay income tax on this.