Maximum Pension Contribution percentage

C

car

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An elderly friend of mine is convinced that the max he can contribute from his salary to his pension is 5%. Anything above that he thinks is either AVCs or would be administration. He's said his company had advisors in telling him same.

Im convinced that the rates are as follows, takenfrom a link on revenue website. See this [broken link removed]

Under 30 15%
30 - 39 20%
40 – 49 25%
50 or over 30%

When I showed this link, my friend was convinced that the percentages were for PRSAs only (which to be fair the link is for) and wont hear of the 5% figure being incorrect. I cant seem to find a link on revenues website that says the same percentages apply for normal, run of the mill company pensions. Does anyone have one?
Also, if anyone could suggest why he thinks 5% would be the max, is there some other 5% figure out there that he could be getting mixed up with.

thanks.
 
Re: Pension contribution percentage

Those pension contribution tax relief limit are not PRSA specific. See . Note that the AVC issue is separate from the tax relief issue. Tax relief applies to AVCs as well as "normal" contributions as long as the relevant relief limits are not breached.
 
Re: Pension contribution percentage

thanks, that pensionsboard link had exactly what I wanted.
 
Re: Pension contribution percentage

Just on the 5% issue, this is probably the amount that is stated as the employee contribution into the Occupational Pension set up by the employer. Probably because the scheme is set up whereby the employer will match the contribtuions into the OP subject to a limit of 5%. This is very common particularly as AVC's can be taken under finance act 1999/2000 whereas the amount paid into the OP is taken under Occupational Rules. He is write in saying that any amount over the 5% is considered an AVC.
 
Reading the pensionsboard link above an employer can contribute as much as they want to your pension and you pay no tax on it?

For example my employer could define contributions of 25% of my salary and there would be no tax implications?
 
Yes an employer can pay as much as they want to your pension scheme - as long as it will not put you above pension limits at retirement ( would have to be pretty high to do so).
 
That's interesting - is there not a point where it is considered BIK etc?
 
Be aware that salary forfeiture is prohibited. So you can't ask your employer to lower your salary and pay the difference in as an employer pension contributon. Well, you can ask!
 
Be aware also that this applies only to Occupational Pension Schemes, not PRSAs. Once the overall pension contribution is not likely to leave you overfunded at retirement, no BIK applies.
 
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