Employer contribution to personal pension?

[basic question]

Apologies if this is a simple question for the experts.

I have a personal pension plan (Eagle Start, pre-PRSA) from when I was self employed.

I'm about to start a new PAYE job.

Can my employer make contributions (on top of my limit for my contributions from my salary) to a personal pension fund?

tx

 

[Guest]

Yes but as far as I know you will be hit for BIK tax and PRSI/health levy on such employer contributions if I'm not mistaken (which is quite possible!). If this is the case then, assuming an occupational pension scheme is not available, a PRSA would facilitate such employer contributions without any BIK implications (i.e. full tax and PRSI/health levy relief - up to the usual age related tax free contributions limits for cumulative employer/employee contributions). There is no harm in having more than one pension fund (albeit normally only one accepting contributions at a time) in case that is a concern:

 

[is this true]

Personal pension versus PRSA?

A company payment to an employee's PRSA is OK, but a contribution to a personal pension fund attracts benefit-in-kind?

That does not make sense! The government is trying to encourage pension savings.

 

[Guest]

As I said I could be wrong. That was the case with personal pension plans up to recently anyway. Employer contributions were treated as normal income and subject to tax and PRSI/health levy. Unlike employer contributions to occupational pension schemes. The rules may be different now and have been changing a lot in recent years with the intro of PRSAs and the levelling of the playing pitch to a large extent. On the other hand if employer contributions to a personal pension plan are still subject to BIK then there is no great difficulty in an employee starting a PRSA in order to facilitate these and making the personal plan paid-up in the meantime. So if BIK does apply (maybe somebody can clarify?) then there's no necessary disincentive to continue pension savings involved in my view. I would be of the view that pension legislation, while streamlined in recent years, is still quite convoluted for most punters to get their heads around....