Hi everyone, hoping somebody could help me to clarify this.
I moved to Ireland again in 2009, and due to Irish legislation I had to leave my company non-contribution final salary pension scheme (I managed to join a company overseas that still accepted people in and continue to do so!) and set up a PRSA. I am the only one in my company here in Ireland to have to do this (only 3 employees in RoI, other 2 are ring fenced by the legislation so it's just me out there!). As part of my new package my empolyers contribute 8% of salary, and i contribute 7%, in order to get the full 15% allowable at my age.
Now, I cashed in my pension overseas last year as i only had 2 years contributions and it didn't make sense to freeze the pension until I retire (I am 28). For some reason, I wasn't allowed to accept a cash lump sum form the pension, and so my company agreed to use the amount to pay my total contributions (i.e. 15%) until this month, when the balance was used up. I have now taken on my contributions, €390 per month.
My question is this:
I have looked at a pension contribution calculator that shows how much your actual contributions are, taking into account PRSI / Health Levy etc. Last year, my (theorectical) 7% contributions I was making added up to a lot more than what they do this year, well I see about €1500 difference between 2010 and 2011 as it appears I no longer get relief on PRSI and Levy. Is this correct? The reason I ask is that my pension is a very touch subject in my company. My boss is not happy I had to leave the non-contribution scheme and wants me to keep an eye on the situation, including going back to him with any changes in pension calculation/legislation etc. If things change, he is happy to support me in seeking salary increases in order to maintain where I was when we first agreed contracts.
So, am i correct in this calculation? Hoping this will make sense to you all.....
I moved to Ireland again in 2009, and due to Irish legislation I had to leave my company non-contribution final salary pension scheme (I managed to join a company overseas that still accepted people in and continue to do so!) and set up a PRSA. I am the only one in my company here in Ireland to have to do this (only 3 employees in RoI, other 2 are ring fenced by the legislation so it's just me out there!). As part of my new package my empolyers contribute 8% of salary, and i contribute 7%, in order to get the full 15% allowable at my age.
Now, I cashed in my pension overseas last year as i only had 2 years contributions and it didn't make sense to freeze the pension until I retire (I am 28). For some reason, I wasn't allowed to accept a cash lump sum form the pension, and so my company agreed to use the amount to pay my total contributions (i.e. 15%) until this month, when the balance was used up. I have now taken on my contributions, €390 per month.
My question is this:
I have looked at a pension contribution calculator that shows how much your actual contributions are, taking into account PRSI / Health Levy etc. Last year, my (theorectical) 7% contributions I was making added up to a lot more than what they do this year, well I see about €1500 difference between 2010 and 2011 as it appears I no longer get relief on PRSI and Levy. Is this correct? The reason I ask is that my pension is a very touch subject in my company. My boss is not happy I had to leave the non-contribution scheme and wants me to keep an eye on the situation, including going back to him with any changes in pension calculation/legislation etc. If things change, he is happy to support me in seeking salary increases in order to maintain where I was when we first agreed contracts.
So, am i correct in this calculation? Hoping this will make sense to you all.....