Employer contribution to staff pension - tax efficient

employer operates small business. Has surplus profit and would like to make contribution to staff member pension. Particular staff has no current pension - 40 years old. What should employer/ employee do? Is the contribution tax efficient. What is maximum either can contribute.

It's very tax efficient. Money goes from employer bank account to policy in employee's name at no cost to the employee and the business can write it off as a business expense. How much the employer can contribute? There's a formula based on years service, age and existing benefits. It will be in the region of 80% of salary. Employee can contribute up to 25% of salary (this is not in addition to the 80%)

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Thanks- is there different type of pensions. Any guaranteed return ? Can one pay lump sum payments into pension? How can one reduce costs / fees

Or....

You could explore setting up an execution only PRSA (to reduce cost/fees) for the employee. The combined total employer/employee contribution for a 40 year old is 25% of Net Relevant Earnings.

The only guarantee return is cash and that is next to nothing at the moment, so when charges are deducted, the return will be negative.

To reduce costs/ fee, do what G Sheehy says, do it yourself.

You can also pay a fee for the advice, so the employee gets more of his money invested and a lower annual management fee.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)