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Pension Fund Question

  • 27-08-2010 8:04pm
    #1
    mark renton
    Closed Accounts Posts: 2,696 ✭✭✭


    Hey people

    I have a Question

    If I have a company and I pay myself each month. I have to pay % for PAYE/PRSI on Net - Pension investment(correct me if I'm wrong)

    example 4k month: - 500 pension contribution leaves 3.5k to pay a % for PAYE/PRSI etc

    My question is what is the max pension contribution I can make per month? Or is there a max?


Comments

  • #2
    TiGeR KiNgS
    Registered Users, Registered Users 2 Posts: 1,435 ✭✭✭TiGeR KiNgS


    http://www.citizensinformation.ie/categories/money-and-tax/personal-finance/pensions/occupational_pensions


  • #3
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    Couple of things to keep in mind (bearing in mind/in addition to the info in the above link). If you are a professional sportsman (unlikely) you can claim 30% regardless of age.

    Further, and possibly more relevant - if you are a proprietary director you are not limited by the % of Net Relevant Earnings as you would be if an employee.

    But bear in mind, just because there is a tax efficient limit to pension contributions if an employee it doesn't mean you're not allowed to put more than the limit into your pension fund - you just wont get tax relief on it.

    There is also a limit of €150k in 2010 as to the total amount you can claim relief on. But if you've this much money to salt away get proper taxation advice! :D


  • #4
    mark renton
    Closed Accounts Posts: 2,696 ✭✭✭mark renton


    thanks smcgiff

    ok so now im either in an age bracket or no limit as a director

    now i have a second question - what are the legal guidelines on a pension fund, like at what point can a pension holder legally withdraw from a pension fund - what happens if the company closes?
    and is there tax to pay on this pension once received?


  • #5
    smcgiff
    Closed Accounts Posts: 5,943 ✭✭✭smcgiff


    My understanding is that once you put money into a pension fund you have two years to withdraw money from the account. If you do withdraw it's taxed at something like 35% - After the two years you cannot withdraw from the fund and will remain there to fund your private pension.

    Whether the company closes or not has no bearing on the pension fund. The company is only a vehicle by which the money is paid into the pension fund.

    When you receive your private pension, together (presumably) with your state contributory pension this will be taxable income alongide your other taxable income at time of retirement.

    Hopefully someone can confirm the above, such as the % rates etc.


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