Pension contribution at Retirement

C

cerberos

Guest
I believe that there is a once off opportunity when one is retiring and does not have a pension - that hey can go back a number of years and do a massive contribution using up mpast years allowances.

does any 1 know about this?
 
If you've been working for the same employer for years, your employer has an opportunity to make a substantial employer contribution prior to retirement. Specific amount is a function of lots of variables, e.g. your age, duration with the employer, salary for the past ten years, director status (if applicable), spouse's details (if applicable) etc.
 
thx liam, but can the employee do it or does it have to go thro the employer and where does the employee get the benefit?
 
Employee contributions are limited to the age-related bands for tax relief, e.g. 35% of net relevant earnings at age 55, 40% at age 60 and so on.

It is only the employer that has the scope to put in larger amounts. Typically, this tends to happen when the employee is a director of the company and is seeking to extract money from the company in a tax-efficient manner. It would be less common for arms-length employees, unless perhaps the company owes them a bonus or similar.
 
There used to be scope a few years back to make ten years worth of max contributions at retirement or termination less any contributions already paid but unfortunately this was abolished in one of the budgets.

Now, if for example you were 65 and retired on 1 September 08, then the maximum you could contribute to get full tax relief on would be 40% of your taxable earnings in 2007, and 40% of your taxable earnings from 1 Jan to 1 Sep. Just make sure you make the contribution iro 2007 before 31 Oct 2008.
 
If you are paying the contributions into a company pension plan, you will also need to make sure that payment is made before you leave service and there will also need to be a contribution from the employer.

If there's no company contribution, you could pay into an RAC or a PRSA and the 31 October deadline (mid November if filing online) will apply to your 2007 contribution.

Regards
Homer
 
"There used to be scope a few years back to make ten years worth of max contributions at retirement or termination less any contributions already paid but unfortunately this was abolished in one of the budgets."

Thx Guys, this is the one I was thinking of.

Is there no other way of getting the same facility?
 
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