Pension schemes are often a key element in the remuneration packages employers use to attract and retain staff. However pensions are really just another (usually longer term) investment product wrapped in a tax efficient ‘pension’ label. To maximise their effectiveness they must be implemented in line with careful tax planning as much of their attractiveness is derived from the tax savings the contributions generate long before the retirement benefit is drawn down.
Income tax relief is available for individuals for pension contributions made. The amount of tax relief depends on one’s age and net relevant earnings. There are also opportunities for the self-employed to claim tax relief over and above the relevant limits with careful tax planning.
Since 2003 employers that do not provide an occupational pension scheme for their employees are obliged to provide access to at least one Standard Personal Retirement Savings Account (PRSA). Employers are required to have provided access to a PRSA to employees who are not entitled to join a pension scheme within 6 months of existing service. These deductions are then processed through payroll so staff avail of the tax savings at source. Through our general payroll services or providing specific payroll tax advice we advise clients on how to implement these schemes and ensure their appropriate tax treatment.
We work with our corporate and individual clients advising on the most appropriate pension structure for them individually and also for their staff. We often work with our clients’ independent pension advisors to ensure a holistic approach is taken and the tax implications of any pension recommendations are assessed.
Our retirement planning section details our retirement planning services for the individual in greater detail.