# Director Pension, Advice on Options?



## blobert (2 Mar 2012)

Hi Guys,

If I want to set up a Director's pension (I own 100% of the company) and my company has €200,000 profit for the year, as an example, how much of this could I theoretically put into a pension while getting tax relief on it?

Also is there somewhere I can read up on how directors pensions work and on the different options available, I know very little about it and am struggling to find useful info!

Thanks


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## Tomorrow (2 Mar 2012)

Hi there -


A company may make whatever contributions are necessary to build up a pension fund which will provide a director with a pension of 2/3rds of final pensionable salary - subject to a maximum salary of €150,000 and a maximum funnd value of €5.4m.
 - see:- http://www.retirement.ie/directorsretirement.htm

Hope this helps


www.accountantonline.ie


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## blobert (2 Mar 2012)

Thanks for that!

How would it work in terms of if I were building a company up with the view of selling it in a few years, ie I'd have no idea what my final salary would be 30 years from now or indeed what I'd be doing!

Is there a limit to how much of the €200,000 I could put into a pension this year while getting tax relief? My plan would be to build up a pension fund of about €500,000 over a few years if possible (while getting tax relief) then to just leave that grow for the next 30 years.


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## LDFerguson (2 Mar 2012)

You must keep within the funding rules while you are in the employment of the company.  If you subsequently sell the company or wind it up in, say, 5 years' time, you can transfer your fund out into a Buy-Out Bond in your own name.  As long as you were within the funding rules while you were working in the company that will be fine.  

The limit as to how much you can put into the pension scheme immediately is a busy little calculation involving your current salary, age, gender, marital status, normal retirement age on the scheme, years of service in the company & existing pension benefits.

Liam D. Ferguson


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## Gekko (2 Mar 2012)

Tomorrow said:


> Hi there -
> 
> 
> A company may make whatever contributions are necessary to build up a pension fund which will provide a director with a pension of 2/3rds of final pensionable salary - subject to a maximum salary of €150,000 and a maximum funnd value of €5.4m.
> ...


 
Aren't those figures out of date?


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## Conan (2 Mar 2012)

Tomorrow,
You figures are "yesterdays" numbers. The €5.4m Fund Cap is now €2.3m. And there is no maximum salary of €150,000.

How much of a fund you can accumulate (subject to the current Fund Cap of €2.3m) is a function of :

Your salary, and
Your potential service with the company
Assuming you will have completed at least 10 years service by reirement age, you can fund for a pension pot sufficient to finance a pension of 2/3rds your Final Salary. 
So for example, if your salary was €90,000, your max target pension would be €60,000. If you planned to retire (say) at age 60 and had a dependant spouse, you could estimate a target fund of circa €2m. Depending on your age now, the maximum annual company contribution might be circa €80,000 (age 40) or €150,000 (age 50). 

Blobert, I suggest you seek out some professional advice (as you see, some websites are way out of date).


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