No longer a Company Director - pension considerations

D

David_Dublin

Registered User
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Hi - wondering if someone can answer this....if I was to change jobs, leaving my position as a company director and moved to a regular PAYE position, presumably previously established executive pension portfolios stay as they are.

I'm currently PAYE but as company director I pay lower levels of PRSI. So if I was to make the above move, would I need to set up a PRSA or different "type" of pension?

Thanks.
 
An executive pension is related to the role you are in. You cannot contribute to it if you are not working for them or if there are no employer contributions. You can though change the trustees under the executive plan and your new employer can take over as trustee.

If that's not a runner, you can leave the benefits where they are or move to a buy out bond, PRSA or new employer scheme.

If your new position doesn't offer a pension scheme, you can set up a PRSA or a personal pension.


Steven
www.bluewaterfp.ie
 
Thanks for the reply Steven.

From what I can gather, with the buy out bond approach, I could access 25% of the value at age 50 tax free, is that right?

What could I then do with the remainder of the 75%. I read somewhere on here that I could buy an AMRF, but could not touch that until 75. Is there another approach that would give me access at 65? Or maybe I am way off the mark on this.

Fund value would be circa 750k.
 
If you draw down from age 50, the choices are:

25% tax free lump sum
€63,500 in an AMRF until age 75. Access limited to 4% of the fund value each year
Remainder in an ARF which you can access as you wish, so you'll have €500,000 in an ARF with complete access

Or

Tax free lump sum of up to 150% of final salary (adjusted downwards for early access)
Purchase an annuity


The AMRF requirement does not make sense and is more to do with industry lobbying when the ARF was first introduced rather than safeguarding retirees from going broke in their old age. In your case, the AMRF requirement, shouldn't be detrimental to your income requirements.


Steven
www.bluewaterfp.ie
 
Are you sure you pay a lower level of PRSI? I think the PRSI rate was standardised to 4% for everyone a few budgets ago - it's the same for self employed and PAYE workers now
 
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