Forming a company to avail of ARFs ?

[Ace]

I am in a DC scheme and am not a 5% director.

Does it make any sense to form my own company, become a 5% director, so that I can transfer my pension funds to a new scheme and avail of ARFs.

I realise that there are various set up costs but it would mean that I am not forced down the annuity route.

I have another pension that gives me the required annual income of €12.7K.

Any advice greatly appreciated.

 

[Guest126]

Would need to have a pensionable income from this company, if not then would not be able to fund a pension in respect of this employment.

 

[LDFerguson]

There's also the issue that you be presumably resigning from your current employment and effectively being on contract with your current employer. This has far wider issues than just pensions, e.g. loss of employment rights, holiday pay, sick pay etc. You also take on the responsibilities of being a company director and pension scheme trustee, doing your record-keeping and tax returns etc.

Liam D. Ferguson
www.ferga.com

 

[Ace]

Would need to have a pensionable income from this company, if not then would not be able to fund a pension in respect of this employment.

The idea was to form a company of which I would be a greater than 5% director.

Then, on retiring from my present job, I would transfer the funds from my current pension to an ARF set up in the new company.

Idealy, the new company would never trade and as such the paperwork & administration should not be a problem.

Would it work?

Ace

 

[Ace]

There's also the issue that you be presumably resigning from your current employment and effectively being on contract with your current employer. This has far wider issues than just pensions, e.g. loss of employment rights, holiday pay, sick pay etc. You also take on the responsibilities of being a company director and pension scheme trustee, doing your record-keeping and tax returns etc.

Liam D. Ferguson
www.ferga.com

I would be retiring and so employment rights etc would not be a problem.

The responsibilities of a director of my own (non-trading) company should not be too demanding?

Any comments greatly appreciated.

Ace

 

[Guest126]

It would not work from info you gave - the max pension is based on the pensionable income...if the pensionable income is 0 then the max pension is 0.

 

[LDFerguson]

This won't work. Revenue won't approve a new pension scheme for a non-trading company and/or a non-salaried member/director. If the new pension scheme is not approved by Revenue, you can't transfer an existing fund into it.