A company can make contributions to a Directors Pension up to a maximum of €2,000,000 in accordance with revenue guidelines.
The actual amount you can have will be based on your age, gender, marital status, retirement age, income level, length of service and value of all existing pension benefits.
The calculation itself seeks to determine the pension fund required to provide you with 2/3rds of your final salary.
You can find the numbers for your directors pension here.
Once you start a plan revenue approval is sought for the parties in your scheme.
How Many Parties Are Involved?
There are 5 parties involved in a directors pension;
- You as the named beneficiary of the funds at retirement.
- Your limited company as the facilitator of the plan.
- The investment provider as the asset manager.
- A trustee as the person appointed to oversee governance issues.
- Your financial advisor as the investment advisor.
Special Contributions to a Directors Pension.
One unique benefit for directors is that they can buy back up to 40 years of unfunded service in one payment.
In effect, this allows the director to quickly catch up on lost time by making a large one-off contribution through the company.
In reality, most business owners aren’t really in a position to make contributions to a directors pension in the early years.
Therefore, this facility recognises that the business may only be in a position to make arrangements when the business is established.
How Do I Set Up a Directors Pension?
There is a strict approval process that needs to be followed to set up an executive pension and the following details are needed;
- Personal information
- Your Drivers license, Passport or Social Services card with a recent utility bill.
- Your PPS number
- A copy (or pdf version) of a pay slip dated within the last 3 months or your last P60.
- Confirmation of the date you joined the company
- Confirmation of your company shareholding
- Details of pension benefits from previous employments
- Details of current company pensions
- Signatures on provider application forms and our suitability statements.
- Company information
- Your company registration number & VAT number
- Company Bank Account Details (BIC & IBAN)
- Three signatures from you on behalf of the company for the purposes of;
- Allowing you to join the scheme
- Authorising the direct debit mandate &
- Authorising the supplementary letter of exchange which is the trust deed.
If you want to discuss your options in relation to your options as a company director then get in touch with me today on 01 442 3929 or drop me an email to email@example.com