Cash sum in lieu of pension

irlrobins

Apologies if this is in the wrong forum, was torn between this forum and Pensions one.

Friend of mine posed me this question and I wasn't sure how to answer.

Take someone who is currently on a gross annual salary of €70,000 and their pensionable salary is calculated as the gross less 1.5 times the National Pension (€11,976.00). They contribute 7% and employer contributes 11.7%.

If the person was to move to a new job, with the same salary but there was no pension on offer by the new company, how much should they seek as an additional cash sum that would allow them to contribute the same amount into pension fund, taking into account income tax, USC, reliefs etc. i.e. protect their net income and pensiont contribs.

I started trying to do the maths but got myself into knots.

Anyone able to break it down for me?

Thanks!

irlrobins

No replies? Are you all doing audit and not tax?

mari2222

Looks about 15K extra to me.

ants09

mari2222 wrote: »

Looks about 15K extra to me.

were did you get the figure of 15K ?

smcgiff

There is a tax forum.

I'm sure there are plenty of people here that would know the answer, they're just too busy with paying clients

irlrobins

If you could show who you calculated the 15K I'd appreciate it!

Thanks

Alan Shore

Not a pensions person but they would have to put the equivalent of the employers contribution into a pension.

So 70,000 - (11,976 x1.5) = 52,036 x 11.7% = 6,088 so they need an extra salary of 6088 which they put into a pension.

irlrobins

And presumably you need to add a futher lump sum to account for tax. I.e., in order to have the €6088 to invest in pension the lump sum needs to be ~ €12700.