Pensions for Owner-Directors & Executives
Key benefits for company directors and executives:
- Executive pension plans allow business owners and key executives to make pension contributions at a much higher level than typical PAYE workers. As a result, business owners can extract wealth from their business into their personal name in a tax efficient way while reducing corporation tax liability.
- You can protect your monthly pension payments so if you become unable to work long term during your working life, your pension in retirement won’t be effected.
- Under pension scheme legislation, business owners can get Tax Efficient Life Insurance, with 40% tax relief for higher income earners. Business owners can also get Income Protection with 40% tax relief for higher tax rate earners.
Employee Pensions: Be compliant to Avoid ‘On the Spot’ Fines & Penalties
Under the Pensions Act of 1990, Irish employers are legally obliged to provide access to pensions for their employees.
If the obligations aren’t met, employers are liable for severe fines & penalties.
As an employer, you don’t have to make employer contributions to your employees pensions, but at a minimum, you do need to have a facility in place for your employees to make their own contributions.
If you don’t have a pension facility in place right now, don’t delay. The Pension Authority’s ‘on the spot’ fine regime applies to employers who don’t comply with the legislation. Call us now on (01) 8570655 & we can help you get compliant.
Use Employee Pensions To Improve Staff Retention
As the economy is recovering and unemployment is returning to near Celtic Tiger levels, recruitment and retention of staff is one of the biggest challenges that employers have. More and more employers are successfully retaining good staff by offering their staff benefits such as:
- Employer Pension Contributions matched by Employee pension contributions
- Death in Service Benefits such as Life Cover
- Income protection benefits
While staff retention is important, you will also help your employees build towards a healthy retirement and lifestyle when they do finish working.
The Future: Auto Enrollment
While you do not have to contribute to pension plans for your employees right now, the Government have indicated that environment is set to change very soon.
In fact they have indicated that by 2022 they will introduce an ‘Auto-enrollment’ scheme. All Employers will have to set up and contribute to an employee pension for each and every employee they have.
Initial proposals suggest that the contributions will be phased in with Employers contributing 1% of each employee’s salary per year, rising to 8% a number of years later. Similar schemes are already in place in countries like Australia (1992) and UK (2008).
How can we help?
Not only can Irish Insurance help the owners of the business with their own pension planning requirements, we also have an expert team of Senior Pension Consultants that can guide you through the options for the business and its employees in relation to pension and risk benefit schemes.