70k into pension before year end

C

cuttingthegrass

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With the new limit on contributions to PRSA's on they way I want to make a 70k lump sum pension contribution from my Ltd company.

I currently aged 45 and have an existing 125k pension pot in a master trust scheme (1.25% - 1.5% management charge)
At the time (3 years ago)I was happy to get the pension set up and did not put much emphasis on the fee as I didn't envisage my business contributing as much.

Older and wiser now the 1.5% AMC charge on 10k is a lot different than 1.5% on 200k so I have got the finger out and I am looking to change.

So I am thinking to set up a new Zurich PRSA exectuion only (through prsa.ie most likely) and contribute the 70k (0.75% AMC) and approx 4k per month going forward.
My question is it possible to transfer my existing 125k fund across to the new execution only PRSA? and combine it with the 70k?

I have contacted a few financial advisors but the info is very general and I didn't learn anything new. (lowest charge was 1% AMC)
From the advisors I spoke with I do not feel the advice is independent and they seem tied to certain products. I can potentially save thousands over the life of the pension going the execution only road.

Just wanted to come on here and ask you guys in the know if there are any other suggestions on what to do?
Imagine I should get it set up in time before year end?

FYI. I have a very small small mortgage remaining and no other loans .

Thanks
 
people with greater knowledge will let you know but I tried to do something similar in October but was limited to max amount as per my age and income limit. Would have been more tax efficient to have set up a pension at the beginning of the year and transferred money in each month (director in umbrella company structure)
 
What's the relevant "year end" in this context?
  1. November 14th 2024
  2. 31st December 2024
  3. November 15th (?) 2025
  4. Company financial year end?
  5. Something else?
 
cuttingthegrass said:
My question is it possible to transfer my existing 125k fund across to the new execution only PRSA? and combine it with the 70k?
Click to expand...
This is arguably irrelevant to your decision to open a PRSA for your new lump sum so shouldn't delay you on that front. However I believe that a master trust pension can be transferred to a PRSA, but you may need to obtain a certificate of benefit comparison before doing it and I think that these can cost up to a couple of grand.

Edit: see point #19 here:

 
Last edited:
ClubMan said:
What's the relevant "year end" in this context?
  1. November 14th 2024
  2. 31st December 2024
  3. November 15th (?) 2025
  4. Company financial year end?
  5. Something else?
Click to expand...
It is my understanding that I need to contribute the 70k to the new PRSA before the year ends 31st DEC 2024.
I will have paid myself 50k gross in 2024 and will then have contributed approx 100k in total to pension.

As next year if I pay myself 50k gross I will only be able to contribute 50k to a PRSA

Maybe I have it wrong?
 
Bluefin said:
people with greater knowledge will let you know but I tried to do something similar in October but was limited to max amount as per my age and income limit. Would have been more tax efficient to have set up a pension at the beginning of the year and transferred money in each month (director in umbrella company structure)
Click to expand...
I thought the max amount as per your age was only for paye workers?
As a director , isnt the max something like €2million? And thats not related to your salary in any way.
 
Just an update on this and after extensive research and some help from a nice chap on here.
As I was late to start a pension I have scope in my master trust plan to make a lump sum payment well over my current salary.
So i am a lot better off to open another master trust pension and transfer the old one over. I will also have extra scope in the future to make extra lump sum contributions above my salary. If I went with the PRSA this would not be the case.
It also cuts out the need for certificate of benefit comparison and there is no panic to get this set up before year end
 
when you say no rush to set it up before the year-end, I assume if you want to have no cash/taxable profit in the company then you need to make the payment, otherwise you will pay CT on your profits and reduce what you can pay in next year.
 
cuttingthegrass said:
Just an update on this and after extensive research and some help from a nice chap on here.
As I was late to start a pension I have scope in my master trust plan to make a lump sum payment well over my current salary.
So i am a lot better off to open another master trust pension and transfer the old one over. I will also have extra scope in the future to make extra lump sum contributions above my salary. If I went with the PRSA this would not be the case.
It also cuts out the need for certificate of benefit comparison and there is no panic to get this set up before year end
Click to expand...
Can you share a little about the details that helped with the decision? Is it difficult to setup a 1 person master trust pension and are there any documents you've found useful? I have been reading quite a bit but it's not so clear for me (yet).
 
Yes, you can transfer it. You have to wind up the master trust that you are in otherwise you have to get a comparison of benefits done which costs €1,500.

@GSheehy runs PRSA.ie. I am not sure what/ if any work he does in helping people transfer benefits across once the PRSAs are set up.
 
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