Company contributions and annual limit

P

Paul O Mahoney

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A very quick question, Company contributions are ignored in calculating the maximum one can put into their individual pension.
However if the company additionally puts a percentage of your bonus into a separate "supplemental " pension that you can't add to, ie any AVCs go into regular fund, are the ER contributions for this also ignored from the annual maximum amount that you can put into your pension.

Note, there is no cost to the employee.

I'm thinking it is , but I would like an answer from those who would be more experienced.

Paul
 
It's not clear from your question: Is the employer making the decision on the payment of bonus to pension, or the employee?
 
Paul, your question is totally confusing. Can you have another go at clarifying.
 
Conan said:
Paul, your question is totally confusing. Can you have another go at clarifying.
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Bonus say 50k , Company pays 12.5 of that into a " supplemental " pension or €6250.
This is in addition to the normal contributions that are made monthly.

There are 2 pensions, one normal and the supplemental one.

Is that clearer?
 
“One normal, one supplemental”.....what does this mean?
If you are saying that you have a contractual bonus that pays €50,000 and the Employer puts €6,250 of that into a pension plan (is the plan a PRSA or an Occupational Pension?), this €6,250 will be viewed by Revenue as an Employee contribution. Is that your question.
 
Conan said:
“One normal, one supplemental”.....what does this mean?
If you are saying that you have a contractual bonus that pays €50,000 and the Employer puts €6,250 of that into a pension plan (is the plan a PRSA or an Occupational Pension?), this €6,250 will be viewed by Revenue as an Employee contribution. Is that your question.
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One is contributed by employee and employer........like most occupational pensions......ie Normal

The supplemental one , administered by the company is an additional pension where 12.5% of a bonus is deposited every year into the fund, with no cost to employee.

Both are based on being employed by the company obviously
 
Sorry Conan, my question is , is this additional employer contribution deemed to be an employer contribution and therefore not decrease the maximum limit that one can put into a pension?
The max allowable is €115k*.35 €40.25k does the €6.25k affect that?
 
I’ve never heard of a structure like that.

If it’s another occupational pension scheme, it doesn’t count towards the personal limit.

If it’s a PRSA, it does.

But it’s not going to be a PRSA.

So the answer to your question is, no, it does not decrease the limit.
 
Gordon Gekko said:
I’ve never heard of a structure like that.

If it’s another occupational pension scheme, it doesn’t count towards the personal limit.

If it’s a PRSA, it does.

But it’s not going to be a PRSA.

So the answer to your question is, no, it does not decrease the limit.
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Its for senior management but now we need to get on with maximising our AVCs being 10 years out.

Thank you all for perseverance I am going for a lie down and then start a course of writing.
 
Paul O Mahoney said:
Sorry Conan, my question is , is this additional employer contribution deemed to be an employer contribution and therefore not decrease the maximum limit that one can put into a pension?
The max allowable is €115k*.35 €40.25k does the €6.25k affect that?
Click to expand...
As I mentioned earlier, if you are forgoing some bonus (ie the Employer puts some of your bonus into a separate pension fund and pays you the balance) then Revenue will view this as a form of "salary sacrifice " and thus treat it as an employee contribution, potentially impacting employee contribution limits.
Having said that, I am confused as to the exact status of the "supplemental scheme". Is it a PRSA, an AVC scheme, a separate Occupational scheme?
If however you get paid your full bonus, but in addition the Employer pays a further 12.5% of the bonus into a supplemental scheme, then that arrangement (sometimes referred to as a "top hat scheme ") is considered as an Occupational Pension and does not impact your personal contribution limits.
 
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Conan said:
As I mentioned earlier, if you are forgoing some bonus (ie the Employer puts some of your bonus into a separate pension fund and pays you the balance) then Revenue will view this as a form of "salary sacrifice " and thus treat it as an employee contribution, potentially impacting employee contribution limits.
Having said that, I am confused as to the exact status of the "supplemental scheme". Is it a PRSA, an AVC scheme, a separate Occupational scheme?
If however you get paid your full bonus, but in addition the Employer pays a further 12.5% of the bonus into a supplemental scheme, then that arrangement (sometimes referred to as a "top hat scheme ") is considered as an Occupational Pension and does not impact your personal contribution limits.
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Thanks, "top hat scheme" love it.
 
It sounds like it ‘employer initiated’ so salary sacrifice shouldn’t be an issue.

An employer telling you that “you’re getting X% of your bonus into your pension” is fine.

The problem arises where the employee says “Hey Employer, any chance you’d stick a few quid of that into my pension?”
 
Gordon Gekko said:
It sounds like it ‘employer initiated’ so salary sacrifice shouldn’t be an issue.

An employer telling you that “you’re getting X% of your bonus into your pension” is fine.

The problem arises where the employee says “Hey Employer, any chance you’d stick a few quid of that into my pension?”
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This is what I wanted to clarify and forecast how much of the future bonuses would be needed to be put away in order to maximise the pension contributions.
To be honest we probably should have been doing this years ago, but life has a habit of getting in the way.
10 years at maximum will help and once I get into the details on being resident in Malta off we go. Hopefully
 
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