Directors Pension Questions

Hi,
I've been self employed now (ltd company) for 3 years. I have no pension at all and would like to start one.
Only problem is i'm as confused as hell about how much i can contribute for maximum tax gain and how to do this.
Can anyone help me please.
Can i make contributions from last tax year now etc.
How do i set it up.
What is the best value pension i can get regarding charges and return.
Help much appreciated.

You need to find out about a 'self directed trust' structure.

You can set up an executive pension and put in a lump sum each year. Mine is with quinn life which has their usual low charges and range of funds to choose from. The percentage of your income you can contribute depends on your age, starts out at 15% I think. I don't think you can make payments for previous years, i.e. you can put in up to 15% (or whatever your max is) per company year.

The limits referred to (15% in this example) are those that apply to contributions made by an individual. There is a cap of earnings that these limits apply to, of €254k at present.

There is no limit on what the Company itself can contribute, except that the benefits at retirement cannot exceed Revenue maxima.

What happens if you start this pension and then go back to a PAYE worker?

Can you continue it?

I'm a director of a Ltd. company also and wish to start a pension. If I start a PRSA does the percentage of my income that I can contribute apply going forward only or can I contribute a percentage of my income since the start of this tax year?

Also an "executive pension" is mentioned above as an option for a director. Can someone explain how this differs from a PRSA?

Thanks

Brouhahaha,

I've looked at all of this area over the past year and I must admit that aspects of it still confuse me. The one thing I will say is this. Go and read about Self Administered Retirement Trusts. There are other lighter weight options as well, but the key feature of them is the level of transparency and control you have.

I would look at pensions as being on a spectrum from the fairly standard Hands off Personal Pensions and PRSA's to the fully hands on Forming your own Trust SARTs.
In between there are pensions that give you some control, but not total control.

If you are the director of a company and you will have a reasonable amount of profit in the company over and above the salary you are drawing out then a look at the Hands On Self Administered side of the spectrum is probably best.

To sum up the benefit of a SART. The company pays to set up a trust which you own.
The company pays money into the trust (lodges it in a bank account). The trust of which you are a trustee can then invest the money to try to build up a fund for your retirement.

There is no income tax for money paid by the company into the trust, even though the trust belongs to you, not the company. There is no Income tax, Capital gains tax etc on any assets or income produced within the trust.

All of the Costs associated with setting up the trust, and all of the contributions to the trust are paid by the company thus reducing the taxable profits of the company.

There are certain age restrictions on when you can access the trust, as there is with any Pension.

These guys describe it in more detail and they are very helpful if you give them a call.
http://www.fen.ie/

-Rd