Setting up Self Administered Pension

[TonyBoy]

I am a self employed Company Director and wish to set up a Self administered Pension. I am 35years of age and am I have a large sum I wish to invest in a Pension at the moment. How much can I invest each year? If in a number of years, well before I am 60 years of age the Company is liquidated where do I stand with the Pension? I do not suggest I will owe money to anybody but I may not be in a position to carry on this type of business in a number of years. My main objective is to set up a Pension for myself.

 

[LDFerguson]

The calculation of maximum allowable contribution by a company into an Occupational Pension Scheme is nopt a simple one. Basically, Revenue looks at your current salary, and potential years of service to normal retirement age. They estimate what your salary will be at normal retirement age, taking into account inflation. They then work out 2/3 of this final salary figure - this is your maximum allowable pension at normal retirement age. You are allowed to include plenty of options on this - escalation on pensions in payment, spouse's pension etc.

Revenue then works back to see if the contribution you're making now is likely to provide a pension in excess of the above 2/3 final salary figure.

In practice, this allows significant scope - contributions of >100% of salary are not unknown.

If in a number of years, well before I am 60 years of age the Company is liquidated where do I stand with the Pension? I do not suggest I will owe money to anybody but I may not be in a position to carry on this type of business in a number of years.

Often when a company is wound up, the company is also the pension scheme trustee and a decision is made to wind up the pension scheme simultaneously. In this instance, you would transfer the accumulated fund into a [broken link removed] or the Occupational Pension Scheme of your new employer, if applicable.