Pension topup, Pension privacy.

[Lozzz]

Hi, I am interested in increasing my monthly subscription to my company pension. I am a bit confused...

1. Someone told me I can put in a lump sum to max my annual contribution for this year in retrospect. How does this work?
2. What is the end of year in pension terms?
3. If I need to put in a lump sum where do I stand regarding tax?
4. My employer is not going to give me any more contribution than at present so would it be tax prudent to have a separate pension if I like the look of another plan?
5. How much info regarding my contributions and pension situation is my employer entitled to get from the broker? (Eagle Star)
6. Is this the last private matter the employer is savvy to now that most other things are taxed at source and so on, if you get my gist?

 

[LDFerguson]

Someone told me I can put in a lump sum to max my annual contribution for this year in retrospect. How does this work?

You may make a lump sum Additional Voluntary Contribution (AVC) before 31st October 2005 and claim the tax & PRSI relief against the 2004 tax year. The time limit is 31st October 2006 for the 2005 tax year.

What is the end of year in pension terms?

It's the tax year (January to December), but see the above extension for AVCs.

If I need to put in a lump sum where do I stand regarding tax?

If you haven't already paid your maximum allowable contribution, you can top it up with an AVC and claim back tax relief and PRSI relief at your highest rates.

My employer is not going to give me any more contribution than at present so would it be tax prudent to have a separate pension if I like the look of another plan?

It would not be tax prudent, as you'll get the same tax benefits whether or not it's an employer-chosen AVC arrangement or one you choose yourself. You need to compare the charges and fund choices of your employer's arrangement with one of your own choosing.

How much info regarding my contributions and pension situation is my employer entitled to get from the broker? (Eagle Star)

Obviously your employer has full access to information about your pension arrangements that you make through the employer scheme. However, if you choose your own PRSA AVC rather than your employer's arrangement, contributions to it are confidential between you, the broker and the chosen PRSA provider. If your Tax Credits are adjusted as a result of a contribution you make, your employer would be aware of this. By the way, Eagle Star are a PRSA provider, not a broker. If you like, they're a manufacturer not a retailer, although they do sell their products directly to the public as well as via brokers.

Is this the last private matter the employer is savvy to now that most other things are taxed at source and so on, if you get my gist?

I'm afraid I don't get your gist, but maybe I've answered your query above?

Liam D Ferguson
www.prsacentre.com