Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Cash sum in lieu of pension

  • 31-08-2011 6:04pm
    #1
    Registered Users, Registered Users 2 Posts: 7,541 ✭✭✭


    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!


Comments

  • Registered Users, Registered Users 2 Posts: 7,541 ✭✭✭irlrobins


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


  • Registered Users, Registered Users 2 Posts: 568 ✭✭✭mari2222


    Looks about 15K extra to me.


  • Registered Users, Registered Users 2 Posts: 717 ✭✭✭ants09


    mari2222 wrote: »
    Looks about 15K extra to me.

    were did you get the figure of 15K ?


  • Closed Accounts Posts: 5,943 ✭✭✭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 :p


  • Registered Users, Registered Users 2 Posts: 7,541 ✭✭✭irlrobins


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

    Thanks


  • Advertisement
  • Registered Users, Registered Users 2 Posts: 735 ✭✭✭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.


  • Registered Users, Registered Users 2 Posts: 7,541 ✭✭✭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.


Advertisement