Why not?
Because it will be manipulated and abused by the wealthy. Company owners can pay themselves and their spouse €5,000 a year each and fund for a pension of €2m each.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
I presume you're referring to SSAPs? I don't know how the limits are calculated exactly, I'm told there's an arcane formula provided by Revenue to pension providers to calculate maximum backdated company contributions.
My understanding is that maximum SSAP contributions are based on the average of the last several years of your declared income. Unless you're contributing back payments, you can't just declare an income of €5,000 every year and have the company sticking 100k into your pension on your behalf. You have to have a high enough salary to justify contributing large amounts that would result in a pension that pays a decent percentage of your recent salary.
Notwithstanding that, my impression is that we have a two-tier that allows large amounts of backdated contributions to be made by self-employed/company directors, a mechanism not available to PAYE workers which is totally unfair. Given the looming pension crisis, I find it amazing that an equivalent mechanism isn't made available to PAYE workers, or just have one applicable mechanism that's fair for all. Wouldn't it garner a lot of positive coverage for the government??
I just realised at least one gap in my previous idea... homemakers who have much-reduced or no income for a number of years. Perhaps they could be given notional salaries, either based on previous income, the going social welfare rate or the average national salary?