Paul O Mahoney
Registered User
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Bonus say 50k , Company pays 12.5 of that into a " supplemental " pension or €6250.Paul, your question is totally confusing. Can you have another go at clarifying.
Yes but its doesn't reduce the gross bonus paid....its additional but goes into a "supplemental " pensionIt's not clear from your question: Is the employer making the decision on the payment of bonus to pension, or the employee?
One is contributed by employee and employer........like most occupational pensions......ie Normal“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.
Its for senior management but now we need to get on with maximising our AVCs being 10 years out.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.
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.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?
Thanks, "top hat scheme" love it.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.
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.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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