Pension Income Tax Relief - PRSA vs Occupational Pension

M

Mez!

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Quick question for all you pension experts out there. I’m getting conflicting advice on maximum allowable pension tax relief for an employee on a PRSA vs an Occupational Pension. See example below.

A 48 year old wants to maximise their pension tax relief (25%) and has a choice between a PRSA or an Occupational Pension. Let’s assume both will return the same over any given period. The employer will contribute 5% to either one.

From a taxation point of view - is it more beneficial for this person to contribute to an occupational pension so they can avail of the full 25% pension tax relief? Whereas with the PRSA, will the employers 5% contribution reduce the maximum allowed pension tax relief to 20%?

In others words, do occupational pension contributions an employee receives from their employer, reduce, or have any impact, on the maximum pension tax relief a 48 year old (25%) can claim from Revenue?
 
Afaiu employer prsa contribution will reduce your max allowable contribution.

But this is not the case with an employer contribution to occupational
 
An occupational pension scheme is a better bet taxwise - there isn't any BIK on employer pension contributions. However if you make an employee contribution you only get tax relief but not a deduction for USC/PRSI purposes =>40% deduction only as opposed to no tax/USC/PRSI on employer funded contribution. The contribution limit of a percentage of €115K does not also apply. The only limitation is the €2 threshold level (which is a nice problem to have). There are limits on employer contributions and the pension experts can calculate that but nothing like the limit on personal contributions. In a sentence - go for an employer scheme if you the option.
 
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