Maximum pension contributions: Employers contributing to PRSAs

[MysticX]

Hi,

Regarding relief for maximum contributions I always thought it was calculated against gross salary... for example:
-You have a relief of 15%
-Your employer contributes 5%
-Therefore you can contribute another 10%

However there's a link on mercer which explains relief is calculated against salary plus employer pension contribution... if you adjust for such in the above example:
-You have a relief of 15%
-Your employer contributes 5%
-Therefore you can contribute another 10.75% ((15% of 105% of salary) - employer contribution of 5%)

http://www.oneview.mercer.ie/plan-your-pension/retiring-soon/maximising-pension-contributions.html

Take Jim in the example above, who is 42. Suppose that both Jim and his employer are contributing to Jim’s PRSA. If Jim’s employer is contributing a figure equal to 10% of Jim’s salary to the PRSA, then Jim’s own personal contributions are limited to 17.5% of salary. This is because the maximum percentage of net relevant earnings that can be contributed at his age is 25% inclusive of the employer contribution but the 10% employer contribution can also be included in the net relevant earnings calculation i.e. Jim can contribute 25% of (salary plus employer pension contribution) less employer pension contribution.

Can anyone knowledgeable in pensions tell me whether this is correct or not?

 

[Gordon Gekko]

That's just for a PRSA.

Take a 35 year old on €60k a year. His employer contributes €10k a year. His salary is deemed to be €70k a year and 20% of it can go into the PRSA as per the age limits. (i.e. he can contribute €4k also).

For an employer scheme, the above doesn't apply and the employer contribution is ignored.