Bit of a hypothetical one but thinking ahead for the future and would love to get my head around how these things work.
Have been researching a bit about executive pensions and see that the company can contribute an amount that would provide 2/3 s of final salary. I’ve also seen information saying that final salary can be calculated using an average of (final) three years of salary .I have also read that 20 years service is needed to get the Max entitlements.
Is it possible to take a small salary for 17 years (say 6,000 per annum as already pay 40% tax on another income) , then raise the salary to 45,000 per year for the final 3 years..and have the company make contributions in offer to provide a lump sum and a pension of 30,000?
If so a few questions..
When can/should the executive pension be set up?
For the first 17 years can the company only make contributions to the EPP in line with salary?
How do special contributions work? Can a special contribution for prior service only be made if there was no exiting pension for those prior years?Is the special contribution amount based on current salary or salary at the time?
I presume the pension of 2/3 of salary is independent of other pensions? I.e I can take a pension of 30,000 from the EPP in Addition to the state pension and a defined benefit pension of 6,000.
Apologies if any of this doesn’t make sense- this is all very new to me and mostly just posting to get an idea of what might be possible in the future, Goes without saying that much financial advice will be needed if this is even a possibility.
Have been researching a bit about executive pensions and see that the company can contribute an amount that would provide 2/3 s of final salary. I’ve also seen information saying that final salary can be calculated using an average of (final) three years of salary .I have also read that 20 years service is needed to get the Max entitlements.
Is it possible to take a small salary for 17 years (say 6,000 per annum as already pay 40% tax on another income) , then raise the salary to 45,000 per year for the final 3 years..and have the company make contributions in offer to provide a lump sum and a pension of 30,000?
If so a few questions..
When can/should the executive pension be set up?
For the first 17 years can the company only make contributions to the EPP in line with salary?
How do special contributions work? Can a special contribution for prior service only be made if there was no exiting pension for those prior years?Is the special contribution amount based on current salary or salary at the time?
I presume the pension of 2/3 of salary is independent of other pensions? I.e I can take a pension of 30,000 from the EPP in Addition to the state pension and a defined benefit pension of 6,000.
Apologies if any of this doesn’t make sense- this is all very new to me and mostly just posting to get an idea of what might be possible in the future, Goes without saying that much financial advice will be needed if this is even a possibility.